After the Allies backed down in Munich, Hitler had the Czech treasury to loot for another year or so of continued military spending before the economy implodes. If the Allies refuse to defend Poland, he then has that to loot, and no reason to pull the troops out of Poland as quickly as possible to deal with the West. In fact, there would be no pressing reason to honor the M-R Pact (it wouldn't be his first broken agreement), and with the troops already there in the East, no reason to stop at the Soviet border. With about 2 less years to build up before Barbarossa, the Soviets might not fare anywhere near as well as they did historically. Hitler would get his single-front war against Bolshevism, and I don't see the UK or France going so far as to declare war on Germany to defend Communism from Fascism.
I don't think I agree with that. At the very least, Britain would interfere. They might not mind Communism fighting Facism, but do NOT want the outcome of a unified power with the combined strength of both. Which is the only outcome either Hitler or Stalin would settle for.
At the very least I fully expect Britain to renew a partial blockade against Germany. perhaps only restricting it to fuel, steel and military goods, to slow Hitler down and give Stalin a chance to achieve an equilibrium. Maintaining that equilibrium would become a major goal of British foreign policy, to prevent either side from gaining victory and pooling their resources, and hoping that at least one of the two toxic regimes broke under the strain and they could swoop in and prevent the war from becoming winner-take-all
I also suspect Mussolini would play a waiting game as well, and keep Italy out of a war like this if he could, for fear of combined British/French naval power. He dragged his feet as it was in the Battle of France, only formally joining the war well after the French lines were broken at the Ardennes.
End result would be Germany and her immediate neighbors facing Russia alone, and England and France being a bit uncertain who to cheer for. I kind of suspect the Western allies would support different sides. France has always been a bit more susceptible to Socialism and has no love for Germany, while the British were much less sympathetic to Socialism and might take a more pragmatic approach, remaining neutral at first and then building up the weaker side to maintain equilibrium. The result of France supporting the Soviets while Britain supported Germany might wind up happening in that case.
And in a war like this, there is a -100% chance the isolationist USA is interested in stepping into it for as long as Japan can keep it in their pants. The war in the Pacific and the rivalry with Japan is the only real danger America can see as long as the Western Allies are not directly fighting, and I could actually see the US ignoring Europe entirely to focus on the rising power in Asia, and depending on events, possibly 2 parallel wars (US v Japan, USSR v Reich) rather than a true world war.