I always saw it as Michael putting plans into action telling Fredo. A pre-emptive strike by causing a chain reaction of sorts. By telling Fredo he could use Fredo's reaction to make his next move.
After telling Fredo his plan he could a) closely monitor Fredo's reaction to being on the 'loosing team' B) see if Roth plans a counter-attack, thus confirming Fredo's guilt or Innocence.
The hero and the coward both feel the same thing, but the hero uses his fear, projects it onto his opponent, while the coward runs. It's the same thing, fear, but it's what you do with it that matters. Cus D'Amato
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