Of course - you are right. All his sweet-talking about Tom's being out is just another display of his Sicilian cunning. He misleads everyone about his true intentions and plans masterfully, even closest insiders of the Family suspect nothing.
All this occured to me first because of that Puso's comment: "Michael faced him and without flinching gave it to him straight."
After all Puzo wrote about Sicilians, if a Sicilian, (as cunning one as Michael especially), gives you something straight, the very fact must warn you.
The meaning of his words must be consequently as far from being straight as possible.