Besides even Fredo would have known there was no way he could operate outside the Corleone business, something on his own Fredo knew the only way “Fredo wouldn't be stuck running Mickey Mouse nightclubs” is if Michael was dead
I don't know how anyone can speak with this sort of certainty about what's going on - in particular what some character must be thinking. Fredo, in particular, is hard to pin down because there's no character continuity from the book to first movie, and very little continuity in GF2.
