You understand the idea. Countries send euros/dollars/whatever to Gazprom via an unsanctioned bank and then those foreign currencies are transferred into rubles at the current exchange rate.

The point is that a) European countries don't have large reserves of rubles lying around and would have no way to get enough of them in time, and while cutting the gas off would hurt Europe more than Russia, it would still hurt Russia; b) this forces Europe to not sanction all of Russia's financial institutions if they want to keep the gas, and it's worked so well that the UK had to reverse its sanctions on Gazprombank so that it could get gas from Russia; c) this primes the west to do similar arrangements for other Russian goods; and, the final and probably most important point:

Russia has now attached the ruble to something in the material world (such as a gold standard, as it has, but also other materials that Russia produces a lot of, like grain and metals) rather than it being free-floating like other currencies. The ruble and the natural gas are now inseparable, which therefore means that so long as Russian gas is in consistent demand, it cannot significantly go down in value (e.g. the petrodollar). Over the next few years it may go down in value if Europe commits to separating themselves from Russian gas, whether that's to switch to renewables or other sources of fossil fuels, but for now, it's now a fairly reliable currency and will get increasingly reliable as more and more commodities are priced in rubles and "locks in" its value. Hypothetically this would cause it to become a reserve currency, though in practice I don't know if that will happen; especially as Russia is stating it wants lots of national currencies rather than just one reserve currency, ruble or otherwise. Anyway, Russia can then control its euro-to-ruble exchange rate by "simply" saying that X amount of gold is now worth Y rubles (and so on for gas and metals etc) and therefore Y rubles is now worth Z euros, which puts the euro in a weaker position than the ruble.

Europe might say "well, that's unfair! just because you say your currency is worth something doesn't mean it is worth that much!" but Russia has the resources and Europe does not, so if it wants to keep getting resources, it's gotta put up with it. So long as Russia doesn't make their own resources more expensive than other options (such as American natural gas), then by the desire of capitalists to make the most profit, they will take the cheapest option.