@Subran The idea is that he's still a human and can make minor mistakes. He made a slip up cause he's only human. The memory manipulation could have issues, so if it back fires a bit, it could be a problem. Especially since she has some authority, and getting on her bad side would be dangerous.
Also, it's sudden. So he's panicking.
@ZanaduKhan Silver posing as or possessing a prince could also be viewed as something dangerous and could back fire. He could lose trust with the Empire or get in trouble with the guild and if Leo allowed it, then that'd mean that Leo might lose trust.
And I think he's able to tell that she's trust worthy; for the purpose of the story, she is trust worthy.