Octavius knows damned well Caesarion is alive......he just doesn't give a damn. We established that he was able to read liars easily when he was 14, imagine how much better he would be now. And by the time Caesarion's old enough to start trouble, he will have aged enough to make him impossible to identify with any real certainty as anything more than a guy who looks kind of like Cleopatra's son. So, let Pullo have him.
- A good idea supported by the fact that by then Pullo is pretty much the only person left he actually seems to like.