I agree that Tessio was probably 'on the fence' from the beginning - he was prepared to go with the side that won..... as Michael said, "Tessio was always smarter". Think about it... you are assigned to protect The Don in the hospital..... cops chase you and your gang away.... you take no action? Make no calls? Inform nobody? C'mon!
Tessio's men were at the hospital. Not Tessio.
And McCluskey had them all arrested. Later, just before he hits Michael, he says: "I thought I got
all you guinea hoods locked up!"