So are Libyans (and by extension Somalians and Eritreans) on track to being assimilated into Italian society? Or are they still subjected to second class citizenship.
Libyan 'Arabs' (many wouldn't identify with the term) are treated equally in theory to colonists and on the whole, treated the same as Italians with a few flashpoints the state condemns (imagine American blacks today). A big thing in state propaganda is that the Italians and Libyans are both 'Romans'. However, 'backward Arabs' (i.e. Arabs who overwhelmingly live in the interior desert and refuse to integrate into Italian society) are roundly mocked. At the same time, the regime doesn't care that some Arabs in the middle of nowhere are grumbling as long as the oil gets out of the ground up north. Young Arabs who stayed in the city generally adopted Italian forms of life but have a mosque instead of a church. They speak Italian, eat pizza and talk about who the most attractive actress is with their Sicilian colleagues. In other words, they're well integrated and are hard to tell apart from the Italians. If an Imam starts preaching Islamism or Pan-Arabism, his fellow Arabs will report him immediately, and the OVRA will send him to prison in a heartbeat. Young Arabs are mandated to join the Fascist school programs alongside their Italian and Jewish fellows, so the social integration in Libya is surprisingly strong. It's one of the few places you'd see a church, synagogue and mosque at the same time - which is great Fascist propaganda when they get accused of being bigots.
Eritreans and Somalians are the next tier. Both are generally tolerated (as in how one would 'tolerate' a colleague), but they are nowhere near as integrated into the population as in Libya. At the same time, the Italians have an interest in being nice to these groups because of the Ethiopians.
Ethiopians got the short stick. They are highly suspected by settler populations (and those settler who would move to the area are generally more racist than the more casual migrants to Libya). The hatred by the settlers is exceeded by the Eritrean and Somalian troops the Italians employ. Taking their cue from British divide and conquer strategy, they play on fears of a resurgent Ethiopia to scare their ancient rivals into doing their dirty work in Abyssinia - which is broadly successful, for now.