He just formally recognized the sovereignty of Donbass/Luhansk. Obviously the next step is those two new "sovereign countries" inviting Russian troops in for security, and Russia obliging. If Ukraine in any way tries to prevent that, that's "Ukrainian aggression" and will be cause for "counterattack" by Russian military.
Donbass and Luhansk are not a huge percentage of total Ukraine and Ukraine did not have control of them for a long time already anyway. There will be enormous pressure from "the West" for Ukraine to just sit and take it and, frankly, that seems like the best strategy for Ukraine no matter how humiliating it is.
The question is, will Ukrainian "aggression" be manufactured by Russia to create a pretext for "counterattack". And, of course, I suspect that if the whole thing is limited to Donbass/Luhansk, Biden et al will not do anything except lament the situation. No sanctions.