Otis is not the man. He's just a scrappy-headed ten-year-old kid. In fact, he's like a version of what Butch was probably like as a kid. For Lucius, he's just another example of the kinds of bad people who exist outside of Jefferson, Mississippi.
Otis is kind of like a foil to Lucius. They're both kids, and they see the same things, but they process these things in two very different ways. For instance, when Otis learns what his aunt, Miss Corrie, does for a living (you know, the whole prostitution thing), he creates a peepshow business: he charges boys of the neighborhood to come watch his aunt at work. Talk about a weird and terrible aunt-nephew relationship.
Lucius sees Miss Reba's brothel quite differently. He becomes angry at Miss Corrie for what she does and at Otis for exploiting her further: "I was hitting, clawing, kicking not at one wizened ten-year-old boy, but at Otis and the procuress both: the demon child who debased her privacy and the witch who debauched her innocence" (7.87). Unlike Otis, Lucius believes that Miss Corrie is better than what she does. He fights Otis to defend the woman's honor, and he punish Otis for capitalizing on Miss Corrie's sexuality.
Otis disappears after everyone helps to smuggle Lightning onto the boxcar. Which is good for Lucius, because this means he is the smallest of the bunch and can therefore be trained as jockey. However, they soon learn that Otis has stolen the maid's tooth right out of her mouth, and he's going to try and sell it for money at the racetrack. He's unsuccessful, and he eventually disappears from the narrative for good, but boy does he cause a headache in the meantime.