I'm guessing there's something else that's either on that, or other, tapes that frightens Trump. He's brushed off all sorts of sex scandals. Those won't hurt him. Unless, perhaps, there are sex tapes with boys. Otherwise, he would have just claimed that it was something akin to locker room talk and Trump supporters would have simply shrugged and wished they could have been the one in that room partying with paid women.
It could be that denying the existence of the pee tape is simply a way to cast doubt on everything in the Steel dossier. Or, there could be something else that hasn't yet been discovered/told. At any rate, the tape as it has been described doesn't hurt him at all.
The Russians have plenty of kompromat on The Most Notable Loser via his money laundering dealings. They don't need a pee tape, but where's the harm in having it? It could be useful in some other way or at some other time.
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