To be honest I disagree, the whole problem is that there isn't any Soviet Union analogue in the lore, after retaking the Imperial city the Empire was exhausted or more accurately Cyrodiil and Skyrim were exhausted, sure the Thalmor lost their main army, but their forces in Hammerfell were still intact and they hadn't leveraged their reserves from the Isles, Valenwood and Elsweyr, the empire on the otherhand had leveraged all their reserves in retaking central Cyrodiil

What we have here is a raising early modern magical state pulling a fast one on a still feudal and fractured empire that had been declining for almost two centuries, over the course of which the Thalmor had been sailing from one victorious coup to the next, after the seizure of Elsweyr the balance of power had tipped and without the resources of Morrowind and Blackmarsh, the Mede dynasty could only rely on the strength of men, which when paired against the magic super-soldiers of the Altmer, the guerilla warriors of the Bosmer and the walking, talking lions of Elsweyr means any human who can't do magic are gonna get their shit kicked in

The demand for the annexation of southern Hammerfell was always a red herring and a ploy to drive a wedge between the empire and one of its remaining stable provinces, the goal of the Thalmor was always the conquest of Cyrodiil above all else and while the lose of their main army was a set-back they knew they could afford to play the waiting game and pick-off more provinces

The White-Gold Concordat is a horrific treaty, but I agree with the take that the Mede dynasty had no choice, military exhaustion isn't something that can just be ignored, but where the Medes made a mistake was in keeping the treaty intact for over twenty-years, at that point it's no wonder the Nords started losing patience