TLDR: Israel can't afford to risk the US UN veto and US support.
Well, first, let's see Israel's own reasons for the embargo:
In September 1973, during a summit of the Non-Aligned Movement held in Algeria, Cuba announced that they would break diplomatic relations with Israel. In October 1973, Cuba assisted Egypt and Syria in the Yom Kippur War against Israel by sending troops and equipment to Syria. After the war, relations between Cuba and Israel were non-existent. Israel and the United States were the only two nations since 1992 to annually vote in favor of the embargo against Cuba at the UN General Assembly against overwhelming global opposition.
Now, having gotten that out the way...
Israel is very highly dependent on the US for its UN Security Council veto. The US has on numerous occasions saved its
bacon pastrami there, vetoing an anti-Israel resolution (some of which certainly have been unfair, but by no means all).
Given Cuba and Israel's respective sizes and distance, it seems rather obvious that Israel's position does not cause Israel that much inconvenience.
On the US side:
The US is, quite, irrational about Cuba. It's driven by a number of factors, not least the Cuban expat community. See Elián González Defeated Al Gore - The Atlantic
The US embargo, whatever one thinks of it (I don't see any obligation for the US to trade with a government which regularly rants about Yankees myself) is not a popular move worldwide. Ritually, the whole UN votes against it and the US and Israel votes for it. The US really needs Israel's vote.
What are US benefits from their alliance?
Now, my opinion of Mearsheimer has been trending down lately, but his The Israel Lobby and U.S. Foreign Policy book makes for some interesting reading. It posits that, whatever its democratic credentials in the area and historical obligations by Western countries to support Jewish safety, Israel has not provided much realpolitik value to the US. The alliance benefits tend to go one way.
Here are some of my own observations:
Gulf War 1. Rather than assisting the coalition, Israel forces diversion of precious resources to hunt Scuds with which Saddam was hoping to get Israel in the war. Israeli involvement has been to date problematic to US initiatives in the region (this may change now with diplomatic normalization, we'll see).
When it would be beneficial to all to reduce Western-Muslim tension, Israel insists on going its own way, for domestic political reasons: Israeli security is one thing, ongoing pointless settlements are another entirely. The US often gets tarred from its support to Israel in that context.
For a very close ally, in a sensitive region, the US has a very small military base footprint in Israel. One base, only since 2017, about 100 people.
Expensive US commitments to aid budgets.
Israel abstained from UN resolution condemning Russia wrt 2014 Crimea annexation. Its 2022-23 support, if for somewhat understandable reasons, has been lukewarm.
Granted, the US benefits from military collaboration and engineering and Mossad was very helpful during the War on Terror. And, again, there are solid ethical reasons to support Israel, if not its treatment of Palestinians.
Still, the US might recalculate the cost/benefit of this alliance if Israel thwarted them on such an emotional subject as the embargo.
Especially on a subject so dear to their Republican supporters.
p.s. it does seem Israel was considering better relations during the Obama-Cuba thaw, but it remained cautious about it
Despite an official request from Washington, Israel has decided not to support the reconciliation between the United States and Cuba at this stage, senior officials in Jerusalem said on Wednesday.
The decision stems from Israel’s reluctance to antagonize the reconciliation’s opponents in the U.S. Congress, most of whom are Republicans and allies of Israel.