To elaborate on this, all 3 characters find it very unlikely that they will be able to hide any of their knowledge. It's true that they could try to construe what they've seen as an act of insanity, but that doesn't mean they really believe it. Haru's "insanity" is also more clear to the players than it is to the PCs IMO.
It seems reasonably likely that Sai et al were acting on Haru's orders, and by extension, Hidden Rain's. Why Haru did what he did, they don't know specifically, but the concept of 'false flag' is definitely in Academy lessons. The emphasis on secrecy from both Sai's team and Haru only further suggests this was info they were not supposed to be privy to.
Clarification: the things that they know are...
- They merked a bunch of genin who they know to be Rain nin who were wearing Hidden Rock forehead protectors and acting aggressively towards Rain civilians.
- Probably some approximate knowledge of geopolitics (Rain and Rock aren't friends, Rain is looking for allies, if word got out that Rock was attacking Rain that would credibly be a nucleation point for an alliance).
- Sai claimed that they were acting on official orders.
- Other stuff?
From this they could credibly infer 'Hanzo ordered false flag attacks on his own people to kick off an alliance'.
But that's not the only theory that fits the data.
All that being said, trying to play it off as ignorance is an option but one they are doubtful would convince Hanzou it is worth the risk of the information floating around compared to just having them killed for treason. If nothing else, someone else could hear the details from them and put it together. If you want to play up the loyalty angle, it would be better (in their opinion) to focus more on their continued worth to Rain and so on than to try and pretend they didn't see anything suspicious
My suggestion here isn't that they try to pretend that they didn't see anything suspicious, it's that they go 'this fucker was
clearly a treasonous asshole (killed our sensei, killed Rain civilians) who lied to the genin in his care (dumb clan kids who don't question anything)' and Hanzou's response there is 'what the fuck, I told him to go
find evidence of Rock attacking Rain, not to go
manufacture it, shit, this can't get out because Rock
is attacking us, I bet this guy was working with Rock to make it look like their attacks were actually coming from Rain, I need y'all to keep quiet'.
Unless Hanzou has a reputation as a particularly heartless and slippery character - the sort of guy who would pass down official orders to stage false-flag attacks on his own civilians to secure allies for the coming war - this fits all of the available facts, no? And I doubt that the viewpoint characters see him that way: they're pretty inexperienced genin who have been thoroughly indoctrinated to believe Rain is moral and upstanding and that Hanzou is divine-adjacent. I think it would be legitimately easier for them to believe that Haru and Haru alone is an asshole than upending their entire worldview.
I'm not convinced that this isn't true, honestly. The only thing that we have which implies that Hanzou gave any orders was Haru's interpretation of his tone in a briefing. Maybe Hanzou meant to maintain plausible deniability, but maybe he just had something (poison gas) in his throat or he was thinking about how much he hates Rock.
(Unrelated: why do you capitalize Senbon and Shuriken? Seems kinda like capitalizing Hollow Point Bullet.)