A limited conventional war. In fact, India only expanded its nuclear program after the 1962 hostilities against China. That is exactly what a nuclear weapon is for, to become a deterrent against a superior enemy, and to limit escalation, and that is what Iran needs to be directed against Israel and the US, which constantly threatens Iran with invasion.
Your question seems to imply that nuclear weapons are completely useless, when in reality, they bring national security to the country when it is confronted with existential threats, which would be the same case with Israel's nuclear weapons. If nuclear weapons are so useless that they cannot be used, you can ask Israel to give up those nuclear weapons, since they will never be able to use them. What is the point of Israel keeping its nuclear weapons? Israel could get rid of nuclear weapons by signing the Middle East nuclear weapon free zone agreement, which Iran has been advocating for the creation of for decades, a proposal that has so far not been accepted in international negotiations, at least in part due to Israel's existing nuclear weapons arsenal.
The implications for Iran’s ability to develop a nuclear weapon are enormous. At the very least, possessing nuclear weapons would allow Iran greater political flexibility in the Middle East. This would likely mean using groups it supports, such as Hezbollah and the Houthis, even more aggressively to threaten and intimidate other countries in the region. It would also mean pushing harder to support pro-Iran militant groups in countries like Syria and Iraq, where Iran finds itself competing for influence. The idea is that Iran could be more brazen and aggressive with these non-nuclear threats because its nuclear weapon would scare other countries into not retaliating. This intimidation could also have implications for energy policy; Iran might feel it can push through demands in the Persian Gulf regarding disputed islands or natural gas fields, or demands regarding production quotas within OPEC.
Incidentally, this points to Pakistan, which has nuclear weapons, as an example of how all of this could play out. Pakistan’s behavior after its public entry into the nuclear club in 1998 is instructive: it immediately increased support for Islamic militants, creating the Kargil crisis in 1999 and the standoff with India in 2000 and 2001. In a classic example of the stability-instability paradox, Pakistan’s confidence that nuclear weapons would deter escalation made limited conventional and terrorist attacks against India possible.
