Sorry, that tidbit is from an earlier draft of the script.

I often rely on that as the story they told Fredo- a story Fredo refers to on the phone when he tells Ola "you guys lied to me". From just the movie, we don't know really know what the lie was.

The reason for the kidnapping was pretty much the same as why Sollozzo kidnapped Tom Hagen in the first movie.
Michael was being tough on negotiations and kidnapping him and putting him under threat might speed up negotiations to Roth's favor. This is apparently the lie they told Fredo- which then would make sense to mark Michael's window. (even though it makes absolutely NO sense to kidnap Michael out of his Tahoe compound. Only Fredo would buy something like that.)

What we DO know is that a lie was told. Fredo did something in the compound to help Roth. Fredo wasn't told it was going to be a hit.