I'm going to have to disagree with quite a bit of what you said, Tiberius.
Insofar as the concept of minispheres is concerned, both size and isolation are relevant. It was intentioned to be ancillary support for multi-polarity, as opposed to bipolarity, which is where your confusion stems from. A world where there are more than two sides, we call multipolar. That has nothing to do with size or military/economic might - the concept of minispheres propagates a world wherein there are more than just two concentrations of power and that they do not maintain an overwhelming advantage over another. No, they do not all have to be equal, and frankly the risk of expansion from any one sphere in terms of power consolidation was always a risk, which every leader was aware of. Isolation mattered because it allowed minispheres the agency to do so as they pleased - the good and bad came along with that free agency. Isolation does not imply a complete lack of willingness to cooperate and work with other minispheres. It expects that there be no long term relationship between any two groupings that would be acted upon regardless of the circumstances. The most problematic failing of this concept was that it demanded a rapid shift in interpersonal dynamics between leaders, and more specifically, a willingness to set aside the past.
Cypher is most correct when he says that this war was horrible for this concept. I would not go so far as to say our alliance's intervention led to bipolarity, as I am led to believe both are war time political constructs and not long standing ones, but it did not do good, and the longer this war continues, the stronger the chances of this world coming down to bipolarity become. As for Chaos and KETOG teaming up, that was the single most reasonable course of action they could have taken, and I'm not going to fault them for it. I expect that you will not, either. You would have a point regarding Rose's involvement, but that seems to have been largely overlooked, so I won't bother with that for now.
As an aside, I know I'm going to be ripped to hell and back for this. You're most welcome to poke me on Discord if you wish to.