I would say he was greatly diminished. I don't think anyone using a Palantri had much to fear because he would have been to weak to notice he was being scrutinized. And though not killed, I believe the intent was that Sauron was no longer any sort of threat once the Ring was destroyed.
Now a weak willed person using a Palantri to look back upon Sauron when he had power, opens up a whole new world of possibility.
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