I think I would disagree that Michael says it to diffuse the situation. In the shooting script for the film (you can find it at: http://www.dailyscript.com/scripts/The_Godfather.html ), the line appears with the following stage/dialogue direction:

MICHAEL
(the worst insult)
You're unlucky.

I never quite understood why this was such an insult - maybe he's indicating that Moe doesn't really have control over the situation.