It was a pragmatic decision based on the military and political realities of the war at the time. Russia invaded Poland on the 17th of September and once that occurred it was concluded by the Polish government shortly after that their proposed defense plan was no longer tenable and begin evacuating all government and military personnel into neutral Romania. Britain protested, rather feebly, about the invasion, but when the Polish ambassador reminded British foreign secretary of their pact he was told bluntly it was British business as to whether to declare war. France was also rather muted on the topic and although they made an advance into the Saar region in support of the Poles once the outcome was inevitable they withdrew back to their previous lines of defense. Basically both the British and French realized that the relationship between Moscow and Berlin was a tenuous one at best and saw no reason to antagonize the Soviet Union with overt and demonstrative condemnation and certainly not an act of war. They could not afford to fight the Germans and the Soviets simultaneously and there was little that could be done to help the Poles in the short term. Any declaration of war or condemnation would therefore be counterproductive to the short term needs of the Allies or the long term hope for Poland. Poland was for all intents and purposes written off and the Allies prayed the political climate would shift and the Soviets would create the two front war the Allies desperately wanted.

To sum up: They didn't declare war for the pragmatic reason that it would have been a pointless and extremely counterproductive gesture.