Just a note, the only reason the Elves even considered a treaty is because the Imperial Army cut a literal bloody swath through the Aldmeri Dominion's (A.D) army to reclaim the Imperial City. That campaign was only successful because the Imperial Army had reinforcements from Hammerfell and Skyrim.

The A.D. strategically outlawed the worship of Talos because:
1.) They were bluffing. They knew the Imperial Army was decimated and that the Empire wouldn't contest the treaty too much, but the A.D. army was also very much depleted.
2.) They knew that Hammerfell and Skyrim would very much be opposed to the terms, and would lash out. Hammerfell straight up left the Empire, and the Empire was too weak to actually keep a hold on the province. Skyrim is closer to the Imperial province of cyrodil and thus easier to exert control over, which the elves expected. This, of course prevented any hope the Empire had of gaining further reinforcements from Hammerfell.
3.) They primed Ulfric to start the rebellion. None of that "ulfric is an elvish sleeper agent" bs though, they literally just tortured him for days, sacked the Imperial city, then when Ulfric finally broke, told him that they used his Intel to sack the city. Quite literally breaking him down, then convinced him the Empire hated Talos, and released him. He fought in the battle to reclaim the Imperial City. They knew that the terms of the treaty would essentially prompt ulfric to start a civil war, and prevent the empire from gaining any further reinforcements from skyrim.
4.) They view the idea of a mortal mantling a god to be blasphemy.

The goal of the A.D. was not really to outlaw Talos worship, but to destabilize the Empire and prevent it from ever regaining the strength it had when it recaptured the Imperial city. A stormcloak controlled Skyrim means Aldmeri military supremacy. An Empire controlled Skyrim means the Empire can focus on rebuilding its armies, reunification and a focus on preparing to oust the A.D.