seems like legitimizing the outright theft of foreign assets is going to give billionaires around the world some second thoughts about the security of their dollars held in u.s. banks
No, the point is that this move undermines western financial system because billionaires all over the world will realize that if they or the government of their country runs afoul of the west, then their assets will be stolen. Meanwhile, freezing and seizing the assets of Russian billionaires amounts to the west doing capital controls for Russia. This would've been a very unpopular move if the Russian government imposed such controls, but the west decided to helpfully do that themselves. This forced Russian oligarchs to invest domestically resulting in Russian economy growing faster than the west now.
