I admit, I haven't heard of this treaty that was signed between the Empire and the Thalmor. Things must have gone very VERY wrong indeed if the Empire is outlawing the veneration of Talos. Isn't Talos a pillar of Imperial identity? It just seems so... extreme. Like offering some middle eastern state peace so long as they stopped venerating Mohammed as the prophet of Allah. It seems like a concession you'd answer by sending the messenger back without his head.
What threat did the Thalmor have over the Empire in order to push that demand through?
Ya got me... The elves were never that strong in the past, but I guess they grew in strength as provinces made themselves independent and turned inward, leaving Cyrodiil to fend for itself against the Altmer and Bosmer. Very nice of them *sarcasm*.
And Talos is very important to all races of Men, Imperials included, maybe even especially. I suspect most all would continue to worship him in private even if forced to deny him in public.
To agree to that treaty, this current Emperor or whichever one signed the treaty must be TES Nero because he seems cartoonishly stupid and evil to think outlawing Talos will save him. Or the Thalmor have secretly installed Jagar Tharn Mk II to usurp the Empire and the real Mede is sitting in Oblivion somewhere like in Arena.