The sanctions don't directly threaten the lives of Russian citizens and soldiers (arguably they may indirectly threaten lives in some cases, though); whereas a no-fly zone that is actively enforced by NATO would almost certainly lead to war with Russia (you can't expect to shoot down Russian planes without military retaliation from them). IMHO, Putin doesn't want a war with NATO any more than NATO members want a war with Russia, so the distinction between perceived direct and indirect threats is important.
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