Focusing at Itachi's words,we can understand that he controls Kaubuto's destiny,thus meaning Kabuto is forcefully bound to be in his Genjutsu and he can make him perpetuosly view the loop of him getting his horn cut
But now he also said it's Kabuto who would decide it,thus meaning he is the one to chose what to do with his life
Conclusions to be drawn are that,or Kabuto realizes Itachi's wise words and changes his path,and accepts himself for what he is and Itachi spares his life,or Kabuto persists in his way and Itachi would have to kill him
That's just my 2 cents
Lt Iceman