I disagree. Vito would not be stupid enough to kill a man who was a member of the Black Hand, since he knew that would pretty much be suicide. Plus, Vito didn't have just himself to worry about, he had a wife, and 3 kids, and I don;t think he wanted his wife a widow, and his kids fatherless. After the knife scene, for the reasons that Turnbull wrote, Vito knew Fannucci was a fraud, and there would be no danger from the Black Hand if he killed him.