Lawrence's rewritten memories of his mother's death make a lot more sense if one assumes that his childhood stay in the asylum was like his stay during the movie. All while he's tortured, the doctors keep trying to convince him that his father isn't actually a werewolf and that he was mistaken about everything. A child who undergoes all of that with the added trauma of witnessing his mother's death would eagerly grasp the explanation that he was mistaken, especially if it meant being set free.
Fridge Horror: In a scene in the extended edition, shortly before the first full moon after Lawrence is bitten, Sir John asks him why Gwen is not at Talbot Hall. He seems genuinely puzzled as to why his son would think it would be unsafe to keep her around. Later on, we learn that he knew that he was a werewolf and that his son was also one and still thought it was alright to keep Gwen on the grounds during the full moon. This is even worse when you consider that while he locked himself up, he made no such plans for Lawrence, meaning that there was going to be a murderous animal running around no matter what.