Kinda surprised the Russians cared what happened to it. Eh, it was before I really paid attention to such things, so I'll assume there was something else going on factoring into that.
Basically, they got swindled. Whether or not they ever had plans to complete the ship is debatable, but they were very clear about selling it under the condition that it never operate as a warship. Previous deals for carrier-turned-hotel deals for a pair of Kiev-class ships turned out fine, and so the assumption was that Varyag (her Russian name) would be more of the same. It then caused some shock to the Russians (and no one else) when the ship got an engine overhaul and such, because China gambled that once the ship was in their hands Russia wouldn't have much to say or do about the situation. Rule 4 looms large here, but basically China said one thing and did something completely different once it was too late to do anything about it.
That said, there's SOME legal standing here. Liaoning is an aircraft carrier, no question, but an operational warship... something of a grey area. The plan is to use this ship as a test bed for how to run a carrier, so that the two they want to build will go into service with experienced pilots and deck crews who learned on the Liaoning. (The same setup proved useful nearly a century ago, as experienced personnel transferred from USS Langley (CV-1) to the new Lexington and Saratoga, giving those two ships a boost in their operational efficiency the day they ran their commissioning pennants up. Liaoning can be viewed the same way- whether useful or not as a carrier, she'll provide a lot of experience to be transferred to the new ships someday).
Of course, the difference between a training carrier and a real warship is whether those Sukhois have ordnance under the wings or not, which makes the whole thing very murky.
EDIT: Wall-o-text posts suck, so I'll offer apologies with a view of the bow of Liaoning to go with it.