The first part of the question is relatively easy to tackle. While there certainly were counter-reprisals to Malmedy which did cost the lives of many Waffen-SS soldiers, the organization was simply too large to eliminate through such methods. A considerable number of participants in the massacre of American POWs and Belgian civilians did manage to survive the war. Additionally, not all Waffen-SS fought and surrendered to the Americans. Fury exaggerated this unofficial policy, but it did not invent out of thin air it either.

The second question is a bit more complicated. The Americans did not forget Malmedy and the military government did have these men on their slate for postwar tribunals. The US Third Army initiated Operation Gallop in October 1945, which combed through SS POWs and hospitals using captured company records to bring the perpetrators to an eventual trial. There were 74 Germans brought to trial for Malmedy and 73 were convicted with 43 death sentences, 22 life sentences, and the rest sentenced to between ten to twenty years. Yet none of the convicted served their full sentence and the last Malmedy prisoner was released in 1956. The reason for this disparity had to do with a constellation of German and American pressures that undercut the judicial process and aided clemency.

The Malmedy trials were part of what historians call the subsequent Nuremberg proceedings, or confusingly, the Nuremberg Military Tribunals (NMT- I actually prefer National Military Tribunals). This was reflective of the wider breakdown of postwar justice after the famous International Military Tribunals (IMT) that tried the surviving Nazi elite. Although the popular memory of the IMT is that they were a success that purged Nazism and made Germans aware of their nation's crimes, the reality was that the IMT were very troublesome proceedings. The length of the IMT and the deluge of evidence did not have the intended impact on the German population; OMGUS (the US military government) opinion polls in the American zone showed most Germans regarded the IMT as a form of victor's justice and were bored with the proceedings even when they had little sympathy for defendants like Goering. Inter-Allied bickering and the emerging Cold War also soured the Americans on conducting collective tribunals, so the IMT was the last of its kind. After the IMT, each of the Allied occupation governments conducted their own tribunals, of which the NMTs were the largest and most publicized.

OMGUS's disenchantment with the process of using the tribunals as a didactic tool to force the German population to come to terms with the past fatally undermined a number of the NMTs. The officials running the NMTs knew they were on borrowed time and there was a pressure to streamline the tribunal process. This meant countenancing what today would be termed enhanced interrogation techniques, such as mock trials or other forms of psychological pressure to get the indicted to confess. These techniques likely slipped into torture and although they did not prevent the Malmedy trial from going forward, news of the Americans' activities did slip out into the wider German public.

As rumors and facts swirled around the interrogations, there emerged within the western zone of Germany a strong public voice that the NMT's were a form of victor's justice. While such sentiments may have been sotto voce during the IMT, they became quite public during this period. While it was not open opposition to the Allies, calls for clemency and an end to the tribunals often amalgamated Allied discourses with notions of an unfair judicial process. For example, industrialists like the Krupp family engaged in a public relations campaign that presented themselves as loyal German patriots that only reluctantly worked with Hitler to save Germany from communism. Others German clemency pleas likened the American's interrogation procedures to that of Hitler's government, pointing out the hypocrisy of OMGUS's claims of moral superiority. The German churches in particular were one of the main bastions of the clemency drive. For the Malmedy trials, Lutheran Bishop Theophil Wurm and Catholic auxiliary bishop Johannes Neuhäusler emerged as the main defenders of the convicted. Both bishops had been under threat from the Nazi regime during the war and owed their postwar position to the fact that many in OMGUS saw the churches as the least morally-compromised institution in Germany and a bulwark against communism. Wurm in particular would highlight the above-average number of Jews among the American gaolers, claiming in public missives that this was an example of Jewish revenge against innocent Germans for the crimes of Hitler.

This drive for clemency found a good deal of traction among both OMGUS and the nascent FRG government. The Adenauer administration would push the issue of clemency and victor's justice as part of its wider reckoning of the past, foisting the crimes of the Third Reich on a criminal few that had already been punished by the IMT. Like the public calls for clemency, the Adenauer government both in public and in private negotiations with OMGUS (later renamed HICOG) pushed a line that the NMTs were both hypocritical but also counterproductive for the Cold War. OMGUS itself was receptive to this pressure, as internal intelligence indicated that executions could damage the popularity of the new German government and their American partners. OMGUS head Lucius Clay acted on the advice Colonel James Harbough to reduce 31 of the capital sentences to life imprisonment. For the remaining 12 sentenced to death for Malmedy, this action by OMGUS also meant their executions were stayed for the time being. Additionally, many within the American military government were not free of the prejudices of their era. Claims of Jewish vengeance were not entirely unheeded and the Army did launch its own investigation and one of the American defense attorneys, Colonel Willis Everett, became one of the most vocal proponents of appeal and likewise perpetuated the notion that the tribunals were corrupted by Jewish members of the prison and court.

American domestic politics also came into play in undermining the Malmedy verdicts. Many Republicans in the Senate were looking into ways to attack the Democratic Truman administration and charges that the American military government was engaging in Gestapo-like tactics presented just such an opportunity. In addition to his more infamous activities at HUAC, McCarthy also spearheaded a Senate subcommittee investigation into these charges. McCarthy was in contact with Everett and their private correspondence indicated that McCarthy was in sympathy with the claim of victor's justice. Much like the NMT's themselves, the Senate's report on the charges of American abuses, the Baldwin report, was muddled. Although the Baldwin report exonerated most of the extreme charges, it did argue that the process was sketchy and care was needed in postwar justice lest the Kremlin take advantage of offended German national pride for their own purposes.

Although the Baldwin's warning against the Kremlin was a subtle attack on McCarthy's politicization of the affair, it also signaled that there was a growing consensus within American policy circles that trials of Germans were a liability in the Cold War. OMGUS surveys repeatedly showed that domestic opposition to Allied justice rose proportionately when directed at institutions staffed by "normal and unpolitical" Germans such as the military or the courts. The Malmedy defendants were a collateral beneficiary of wider calls for amnesty for German military offenders such as generals and other officers. The Adenauer government also began what later became aptly known as "amnesty fever" in the early 1950s as it pushed the Western Allies to release war criminals both as a matter of mercy, but also to redress what a good portion of the German public saw as victor's justice. Again, the Cold War facilitated this process as clemency advocates asserted that American recognition of their mistakes would differentiate American liberal justice from the totalitarian show trials of Hitler and Stalin. Clay and his successor at HICOG, John McCloy, were also fervent anticommunists and this line of argument resonated well with their own ideological convictions, as well as the claim that amnesties would return Germany to normalcy and ensure it was a reliable partner in the Cold War.

The result of these public and back-channel pleas was that none of the Malmedy NMT verdicts were carried to term, even for officers like Peiper. It was not so much that these Waffen-SS men escaped punishment. They had a legal trial and the sentences were not that far out of the line for their actions. Few of the advocates for clemency, German or American, actually contended the convicted men did not participate in a massacre of POWs and civilians. But the Malmedy accused were the beneficiaries of a larger process in which both the Americans and Germans walked away from using courts as a means to punish the crimes of the Third Reich. Justice became subsumed in the wider need to fight the Cold War and by around 1950, most of the policy elite in Bonn and Washington saw the tribunals as a relic of an outdated and failed policy.