In Naruto Shippuden during the fight of Itachi (Edo) and Sasuke vs Kabuto, Itachi places Izanami on Kabuto. In the end of the fight Kabuto releases Itachi. Then Sasuke and Kabuto go their own ways. Why don't they attempt to kill each other? I am not sure whether Kabuto still wanted to kill Sasuke after the fight but Sasuke definitely had no good reason to trust Kabuto. Is Sasuke simply afraid of getting killed by Kabuto?
Sasuke doesn't try to kill Kabuto for three reasons:
- He was following Itachi's lead.
- Kabuto was already defeated.
- He didn't encounter Kabuto again until Kabuto was reformed.
While fighting, Itachi comes to sympathize with Kabuto, because of the similarity between their lives. They were both spies, with betrayal as their forte, erasing their identities and allegiances, hardly aware of who they really were as a result. When Itachi traps Kabuto in the Izanami, the battle is finished. Kabuto cannot escape the jutsu until he chooses the path of reformation. Itachi also manages to get Kabuto to release the reanimation jutsu. There is no need to kill Kabuto at this point, and Itachi thus won't kill him.
Sasuke is following Itachi's lead. Though for most of the series, Sasuke hates Itachi for killing their clan, his hate returns to love again once he learns Itachi's reasons for doing destroying their clan (and after killing Itachi), and he seeks revenge on the Leaf Village for betraying Itachi, mainly out of his love for Itachi. Thus, Sasuke is swept away by Itachi's return, even going so far as to switch sides and help Itachi defeat Kabuto. Sasuke is unlikely to disregard Itachi's decison to leave Kabuto alive and thus doesn't finish the job even after Itachi disappears.
Finally, Sasuke doesn't pursue killing Kabuto at any time afterwards because the next time they meet, it is as allies. During the war, when Sasuke is injured, Kabuto shows up and heals him (see section Birth of the Ten-Tails' Jinchūriki on Kabuto's wiki article). Kabuto chose to accept the path Itachi left for him, and thus is reformed and an ally. Sasuke does have good reason to trust Kabuto, because Itachi's Izanami left no other option but for him to become someone Sasuke can trust (aside from staying trapped in a time loop forever), and Kabuto healing him is proof of this. At this point, there is no reason for Sasuke to kill him.