I have very little doubt that the Italian designers
could have come up with some very good designs for fighters using large radial engines. They just wouldn't have been the old MC 200, RE 2000 or Fiat G 50 with old radials taken off and more powerful radials bolted on.
The MC 200 was modified quite a bit in the fuselage to become the MC 202 and the MC 205 was the ONLY 5 series fighter to retain much commonalty with the early "0" series fighters.
The RE 2001 having a new wing to replace the one used on the RE 2000 in addition to the engine swap to the DB 601 engine.
The RE 2005 was a new project and not a re-engined R-2001/2.
The Fiat G.55 was a new design that ,while it Incorporated much that had been learned form the G 50 (and a one off prototype of a G 50 with DB 601 engine) didn't really use any major parts/sub assemblies from the earlier fighter.
AS for the Italian radials, information in English is a bit lacking. Alfa Romeo had one 18 cylinder radial, Fiat had two different 18 cylinder radials and Piaggio also had two 18 cylinder radials in the works leading up to the war.
See:
Alfa Romeo 135 - Wikipedia, the free encyclopedia
Fiat A.80 - Wikipedia, the free encyclopedia (Please note the light weight for a 45.7 liter engine)
There was a Fiat A 82 engine with 2mm more bore that weighed another 300lbs that offered more power but is even less known than the A 80.
Piaggio P.XII - Wikipedia, the free encyclopedia ( please note that the "uprated" XXII may have included a 10mm bore job and an additional 7 liters of displacement.)
The large Italian radials were handicapped by lack of high octane fuel, and low rpm. The last
may have due to lack of materials or a result of the low weight of the engines. The Piaggio XXII having almost 10% more displacement than a wright R-3350 and yet about the same weight as a late model Wright R-2600 14 cylinder radial. Strangely, using 87 octane fuel it has a performance similar to the later R-2600s using 100/130 fuel. Perhaps not a bod choice of basic design given the fuel available and manufacturing base/technology. The last in regards to forging heads vs casting them and being able to machine deep fins closely spaced or other means (like the Wright sheet metal fins) of keeping the engines cool.