Another version of MAD?

During the Cold War, yes remember the Cold War, a time of peace and stability in comparison to today's "age of crises", a philosophy emerged regarding superpower politics. Known as MAD (Mutually Assured Destruction), this policy prevented all out nuclear war by acknowledging the fact any attack by one country no matter how destructive would be matched in kind by the other country. Thus since there could never be a clear winner in a conflict, peace was achieved.

And now to the present.

Israel is acquiring 3 more submarines from Germany, for a total of 5 of these type of vessels. These Dolphin-class submarines are supposedly capable of firing missiles with nuclear capability. No doubt that this provides Israel with more insurance regarding any existential threat.

There is presumably one major threat to Israel currently, that being Iran. With Iran threating Israel, the concept of a more localized MAD starts making sense. Presumably, Iran is not irrational when dealing with its own survival, so with a multi-submarine threat Iran would not be so bold as to launch any missiles. On the other hand, diatribes by either side should not confuse the issue of actually taking any irreversible courses of action by either side. Talk as much as you want, but don't push any buttons.

Of course this brings us to a more fundamental question, given the proliferation of very sophisticated weapons systems, will the concept of a localized MAD philosophy proliferate to other regions. Rather then fighting a conventional war, nations will refrain from fighting simply because of mutual self-destruction? Can MAD work between nations of varying size? Can a much smaller nation prevent a larger nation from actions beneficial to the larger nation? In a world of cheap and available WMDs that may be the case.