MAD is there for a reason, anyone who thinks that a nuclear attack within territory of a NATO country or forces within the areas that fall under Article 5 won’t trigger a nuclear response is kidding themselves.
And not only that eroding the threat of MAD makes the world a far dangerous place because it makes a first strike more likely.
That said even if the conflict goes nuclear there are different levels of escalation a targeted nuclear attack on say a military target would likely trigger a proportional response even if it’s a nuclear one.
And outside of NATO the US would very likely respond with a retaliatory nuclear strike against a nuclear strike on its forces where ever they might be.
The point is that they don't "need" to respond with nukes. They can trigger article 5 and start a conventional war and achieve the same or better outcome; possibly without even putting boots on the ground. For example, NATO could (likely) sink the remainder of Russia's Black Sea fleet within a few days of triggering article 5. And/or they could actually establish a no fly zone and be fully justified in doing so.
Responding with a full on nuclear assault because someone first strikes with a Nuke that's smaller then those used in WWII doesn't make sense. You can probably do more damage with chemical, biological, or cyber warfare then a nuke like that (unless targeted at a dense population center).
Not only would they need too but they would must response with nukes because if they don’t it makes the world a much less safe place.
If Russia thinks it can use nukes without a nuclear response they’ll use them, this is literally the entire concept of MAD and any erosion of it brings us closer to a nuclear war.
And if the US thinks it can make a nuclear response without a larger nuclear response...
Remember the mindset of Putin. "What good is a world without Russia?" It's better to have no world than a world where Russia is not a central player.
And not only that eroding the threat of MAD makes the world a far dangerous place because it makes a first strike more likely.
That said even if the conflict goes nuclear there are different levels of escalation a targeted nuclear attack on say a military target would likely trigger a proportional response even if it’s a nuclear one.
And outside of NATO the US would very likely respond with a retaliatory nuclear strike against a nuclear strike on its forces where ever they might be.