It's not a pure illustration, though. Maybe the others thought "Huh, that's just a regular cat. But if I say that the king might ordered me killed in the kind of way people die in Martin books. Better kiss some ass.".

I agree that the existence of this factor makes whether someone announces that it's a normal cat a poor indication of whether they actually realized such. However, I think it's reasonable to hypothesize that Syrio was looking for someone who both recognized that he was holding a normal cat and was willing to tell him such.