That's a good comment. In the book they made even Vito fear him, and he was described as Loyal and immensly powerful and intimidating. In the film he seems nervous and wound up about making a mistake when congratulation Vito, thus turning around the roles and showing his fear of the old boss. He also looks gullible and helpless in the bar before he gets killed. The reason but this is completely unexplained, it certainly isnt to make way for the other capis because they all play a major role later on in the film and in part II, and Neri in III.
Definitely wasnt to clear the air for Michael, there is no question that if Vito wanted him to be loyal to the new boss, he would follow the orders with impunity ala Calo to Tommassino in GFIII.