The key to this question is Vito's recovery:
If Sonny had survived, Vito still would have recovered, and he would have still been head of the family. He still would have had to deal with bringing Michael back safely from Sicily. So, I'm guessing, Vito would have made the peace he made, and brought Michael home.

With Sonny as the head of the family in Vito's retirement, I'm guessing Vito would have approved of Michael NOT becoming Don, but finishing law school and becoming a "legitimate" political pezzanovante. In that capacity, he would have worked to legalize gambling, either statewide in NY or nationwide, and to channel Vito's labor support to his own political campaigns, and to use as a lever to get other politicians to support him. Sonny would have been head of a diminishing olive oil business--in effect, Michael's muscle whenever he needed it. Michael would become head of "Corleone, Inc."--a semi-legitimate gaming and labor organization.