I think there is an awful lot of fic going to be jossed one way or another when it finally happens in canon. At the moment I can read a wide variety of reactions on Arthur's part too, but I agree about where the show will likely take it.

The plausible deniability argument is an interesting one and I've seen it used. I nearly had Merlin say something like that in my flashfic, but it didn't fit in - and the Arthur in that definitely wouldn't have appreciated it. I think people in general very rarely react well to being lied to for their own good. It might be kinder, but it is still a betrayal.