As I said in my original post, "People with lots of money who are used to getting their way in all things don't intimidate easily."
I believed that then, and I believe that now.
Woltz would have been completely freaked out by the horse head, as anybody would be. After that, it would have galvanized him.
People with lots of money who are used to getting their way in all things sometimes lose touch with reality. Once his bluster failed to imtimidate Tom and Vito, what real power did Woltz have to fight the Corleones?
People with lots of money who are used to getting their way in all things are pragmatic. Woltz realized that he was up against an adversary who could kill or ruin him on a minute's notice. It's not worth losing everything to continue a spat against a romantic rival.
