Tessio did not know that Mike would ever find out. He underestimated Mike, because Barzini and the other families were mopping the floor with Mike.Mike wasnt pushing back, because he didnt want his plans screwed up, and Sal took it as a sign of weakness. Considering the circumstances and the knowledge Sal had at the time it WAS the smart move. As GP said, Tessio does not have a crystal ball, there was no sign that Mike had anything planned.