Were "Russian peace" then means "comprehensive de-ukrainification and elimination of the intelligentsia to leave a braindead husk of a state behind", as publicly announced in Russia and partially implemented in occupied areas.

Oh, yes, it is basically the kind of peace that the Mouth of Sauron offered to Aragorn and Gandalf during their parley, if not worse.

Are they going to end up with a better deal than what Russia was demanding before the war, or a worse one? Right now it's looking like worse, with Russia demanding territorial concessions in addition to Ukraine staying out of NATO.

And that's not even considering how Ukraine has taken thousands of casualties, has it's economy wrecked, had millions of people flee the country, and much of their infrastructure is ruined.

That compares the options as if the negotiation was a one-time thing. But game theory would say that giving in to Russian demands would get you … more demands.

Yes, any sort of demilitarization would make them into a satellite state, crushable at will.

They can possibly agree to territorial losses (though after all the bloodshed and murder I consider even that unlikely - not just that, but the West does not want Putin to gain anything from this war, so it will support Ukraine until victory, however long it takes), but not to any kind of hollowing out of their army. That would be a prolonged national suicide.