Not fabrications. There's no way Britannia would've let Zero stay in charge under such a treaty. It would've been Euphie, probably. The Black Knights would've disbanded since there was no more revolution.
Japan has almost no war resources. That's why the Japanese invaded China and the rest of East Asia. Sakuradite doesn't help unless you can sell it, which Britannia might not allow.
Territories aren't allowed to have free-standing armies. Only Britannian armies can exist. These armies are always under the control of non-Elevens.
Add to that that the Emperor doesn't LIKE making treaties with inferior nations and the fact that Britannians are always racists, and you've got everything sliding back to tyranny like always.
Except now, Zero is marginalized and the Black Knights don't have time to reform. Because Britannia corrects its mistakes.
Unless it's Season 2 of Code Geass.