Even Michael volunteers that 'Roth misled him' in order to beckon him home. That wasn't just to lull Fredo into a sense of false security. They all believed he knew very little, and provided just enough information (whatever that may have been - it's never revealed) to enable the plot to be carried out.
What did Michael think? Did he believe Fredo knew about the hit? When did he change his mind? During the boathouse conversation?
It's one of the moments that I don't really understand even though it's powerful: "Fredo you're nothing to me now you're not a brother, you're not a friend."
Was Michael angry because
- Fredo didn't deliver more infor about the hearing?
- Fredo by his epileptic behavior showed that he knew in fact it was going to be a hit?
- Fredo put his own interests over the family?
I believe Michael may have been contemplating giving Fredo a pass. But in that boathouse meeting, when Fredo showed that he knew that the Feds had Pentangeli and, more important, that Questadt belonged to Roth, Michael knew Fredo was in with Roth far deeper than he had seemed at first. The clincher was Fredo's anger and resentment at Michael. He knew that Fredo would be a danger to him as long as he lived.
To Lilo's point about self-deception:
In the Ian Fleming novel, "Thunderball," Giuseppe Petacchi, the NATO pilot who is contacted by SPECTRE to hijack and deliver a bomber with atomic weapons on board, is told by SPECTRE that they're a political group that wants to call attention to themselves through the hijack. Fleming writes, "Petacchi closed his ears to this specious tale. He didn't care what their motivation was, as long as he got paid." Similarly, Fredo may not have cared what Roth and Ola told him their plans were for Michael--as long as he got to be the Don.
