Thanks for the comments,
Inziladun and
Mithadan.
The published
Silmarillion does say in Chapter 6 that Melkor was first given a provisional pardon by Manwë, and confined to Valmar; but after a while he was allowed to '
go freely about the land'. The reason was that Manwë '
was free from evil and could not comprehend it', knowing that in the beginning, Melkor '
had been even as he; and he saw not to the depths of Melkor's heart, and did not perceive that all love had departed from him for ever'.
I was always amused by the fact that at least two of the Valar weren't taken in by Melkor's act: Ulmo and Tulkas.
John Garth, in Chapter 11 of his
Tolkien and the Great War, looked at Tolkien's story 'The Fall of Gondolin', saying of the bronze dragons, fiery dragons, and iron dragons built by Melko for the assault on the city, that '
The more they differ from the dragons of mythology, however, the more these monsters resemble the tanks of the Somme'.