If Lewis was well ahead in the championship, I could see Merc announcing Russell ASAP but as things stand they can't afford to upset the apple cart (VB) and risk losing the WCC.
I'd sign Russell and keep him happy, move VB on to someone else with a golden handshake and let Lewis know that they're giving the up and coming talent a punt (as McLaren did for him). If Lewis doesn't want to take the gamble in 2022 with the new aero regs he'll retire as 8x WDC and if the Merc is a dog then he saves face. If he stays and the car is a dog he risks being beaten by Russell and everyone else jumping on the "it was the car all along" bandwagon... I don't think he wants that.