Castellano was mad at Nino, but I do not believe he would have had him killed. Gaggi was a powerhouse with strong connections to the Sicilian faction of the Gambino family. Gotti got luckey and dodged a few attemps on his life that were meant for him by the Genovese, the Lucchese crime families, Danny Marino and Jimmy Brown after the Castellano hit. Gotti would have left Nino alone and let him serve out his sentence, he would not have wanted to deal with an inner family fued if he killed Gaggi. Gotti wanted to stablize the Gambino crime family and killing Nino would have ignited that war. Most likely John would have left Gaggi as Capo so he could make a peaceful grab for boss of the family without angering the other skippers and members of the family.