Paul was could be pretty lenient when it came to hitting his personal guys. Roy was a psychopath that could only be dealt with in that fashion considering his lengthy resume and legal problems. Nino was closer to Castellano and there was plenty of time to dispose of Gaggi, so I don't think so.

To your second point, Gaggi had health and legal issues as his excuse. Even though he was on the outs with Paul at the time, Nino was seen as a Castellano guy and was probably worried about the new regime's stance on him. Gotta probably figured, Gaggi was going to the can anyway or die, so they just let it be. Of course, someone is always there to take over the racket