Even before the release of Chapter 1067 spoilers, many claimed that Vegapunk succeeded in creating a perfect artificial Devil Fruit: the only thing we do not know whether Momonosuke can do with his Devil Fruit is enter the hybrid form. Apart from that he was able to create and manipulate flame clouds and shoot this dragon laser thing out of his mouth with which he almost killed Ryokugyu. To me it would seem that those abilities would be far more difficult to recreate than simply turning into a (half-) dragon.
Now if it’s the case that Vegapunk did create such a fruit, the reason for them not to tell the World Government is fairly obvious. If the World Government knew that, they could simply mass produce extremely powerful Devil Fruits, feed them to their soldiers and create an unstoppable force. This is basically the exact same thing Kaido did (or tried to do) with his crew and subordinates. He gave the most powerful ones the real fruits and fed the fodder the Smiles that still made them way more powerful. Now imagine instead of a guy with his head sticking out of a chickens anus you’re fighting 20 marines that can transform into dragons and shoot laser beams at you. Or why even stop at Zoans? Who says Vegapunk couldn’t recreate the Logias or Paramecias the Admirals use? Why even stop at giving them to Marine Soldiers? Objects surely are far more obedient. There are virtually no limits to this. The Marines would become truly unstoppable.
And that is the reason Vegapunk couldn’t do it. So he lied and the World Government believed him.
They believed Vegapunk but they were definitely suspicious at that point, and this is exactly where the key to this whole thing comes into play. Ryokugyu. In his fight against Momonosuke and the Scabbards he makes a very interesting remark.
As an Admiral who seems to be perfectly fine and agreeing with the World Government’s and Celestial Dragons’ rule over the world, he probably knows a thing or two about the legendary (mythical) Devil Fruits going around the world. If there were 2 Dragon fruits, him and the World Government would certainly know about it, but his fight against Momonosuke was the first time he heard of something like that.
Now after he got driven off Wano he’d have reported that to Akainu or the Elders and that could obviously only mean one thing. Vegapunk created the Devil Fruit and hid it from them. From the World Government’s point of view this can only mean that Vegapunk’s allegiances aren’t what they should be. It takes no genius to deduce that Vegapunk might then also have some ties to the Revolutionary Army, considering the time he spent with Kuma during the experiments. So they have only one option left to go with: send out CP-0 to assassinate the world’s most useful scientist.
Now Chapter 1067 Spoilers definitively confirm that Momonosuke’s devil fruit was not a real failure. Vegapunk considers Momonosuke’s devil fruit a failure only because it failed to reproduce the blue color that distinguishes Kaido’s Fish-Fish Fruit, Model Azure Dragon.