As mentioned, we can read into the character whatever suits our fancy, but there's no real evidence in either the film or the novel that Michael 'despised' infidelity. Just because he didn't mess around on his own wife and nor did his father...does not necessarily mean he had an opinion on it either way for others.
Obviously he knew Tom had a mistress, as he referred directly to this in that later scene in GFII. Whether or not it was Sandra we'll never know (up to speculation, I guess). But despite your intelligent arguments Don Cardi & Turnbull...there's really no reason to suspect he would've put a stop to such an affair simply to honor his brother's memory. Michael Corleone had far too much more on his mind. It's possible that even if he might've disapproved, the memory Sonny's known infidelities would obliterate any defense of his 'honor'.
And forget about Michael...personally, I don't think it was in Tom's character to conduct and affair with his brother's widow! If the idea was beaten around at one time by FFC/Puzo, it is quite fortunate they dropped because it never would've been believable in the film.
Oh...and the reason Michael got pissed at Fredo for having the girls in the hotel is that he was there strictly on business. He had no interest nor any time to waste on a party.
Now...Fredo not knowing he was about to die, there's PLENTY of evidence of that, in his behavior and overall character throughout GF and GFII.
Apple