Barzini: Then we are agreed The traffic in drugs will be permitted but controlled and Don Corleone will give protection in the East and there will be peace
It seems to me -
Michael's safety on his return from Sicily was brought up by Vito only after the above peace agreement was reached
Just because Barzini said that doesn't mean an agreement was reached. Vito makes Michael's safety a condition of the peace agreement.
Whilst Vito's veiled threat, should anything happen to Michael “And that, I do not forgive” in reality there was little to nothing that Vito could have done, in the Corleones' dilapidated state
The Corleones weren't really dilapidated. Maybe not at peak strength but, remember, they played up their perceived weakness to entrap the other Families. Tattaglia certainly seems to think Vito has the power to exact vengeance.
Plus, Vito clearly still had the political/police contacts to blow up the other Families' drug rackets and probably put most of their key people in jail.
