I actually don't think he will use nukes. My reasoning is that while we may not counter with our own nuclear response, what we would do is reach out to China, Saudi Arabia, Mexico and any other "Neutral" countries and say they are either on the side of NO nukes and shutting Putin/Russia down, or they are going to face the same economic sanctions as Russia. So they jump on the Russia is a pariah economic bandwagon or they join them. Pick a side.
I would hope this has already been conveyed to China/Saudi/Mexico/etc, and that they have passed it along to Putin that if he crosses that line they are out in whatever tacit/hidden/neutrality support he has been receiving.
While it is a big bombastic threat (Russian negotiating tactics), it is not something (tactical nukes) that will drive any significant battlefield success and then his own people would say "We nuked our "cousins" in Ukraine in order to 'free' them?" and the rest of the world will say WTF!!
To Putin the threat has more power/influence/benefit than the act. It's kind of like a hostage taker with a gun to the head of a hostage making demands. If he pulls the trigger he has lost all his leverage and shit gets real.