What i feel is johny would either abandon cobra kai or make kreese to leave cobra kai.he leaves cobra kai doesnt mean he would join hands to laruso rather he would end up to self realization and specifically ignite the flame of goodness in miguel.
Regarding the tragic scene of miguel, i believe he would have some permanent damage and would nt be able to continue karate. Troy and hawk are easy prey for kreese.
All will be sympathetic for miguel and i think it will settle things someway. Also johny and laruso would enter into a harsh quarel and would end up exhausted and giving up.