I believe Aiuppa initiated the ceremony right around the time he allowed the East Coast families to take over AC as long as they stayed away from Vegas. Perhaps it was a way to legitimize the Outfit in the eyes of east coast families or perhaps it was a way for Aiuppa to gain more loyalty.

In reality, the Outfit was much less of an ethnic gang. Still dominated by Italians but by the 1980s or so you didn't have as many guys active who could actually speak Italian fluently or understand what the fuck was being said.