Now, which he should have done on basis of 10% possibility?

I'm not sure what would be the best tack to take; knowing everything I do about the subsequent course of history, I think delaying the bomb program as much as possible would have been best, but I don't know if that was the best decision one would've made at the time.

and 'business as usual' still leads to update from 10% to much larger probability, just a bit later

Secrecy was already a major issue; business as usual could well lead to a fatal leak of information to the Germans who still were probably the first or second greatest physics establishment in the world and who Fermi must have known were also working on nuclear issues and were aware of the possibility of nuclear explosives; relevant papers were being kept secret and classified, etc. No, anyone at the time knew perfectly well that this was not a harmless issue with no consequences or actions which could be taken.

Well, anyone at the time if they weren't pulling a Fermi and essentially acting as if the 10% possibility didn't exist... Whether one decided to retard or advance the bomb, it seems highly unlikely to me that acting exactly as if he hadn't figured ~10% would just happen to turn out to be the right decision! Listen, I'm not the one claiming Fermi ignored the possibility, it's right there in the reference:

Many years later Szilard succinctly summed up the difference between his position and Fermi's. "From the very beginning the line was drawn," he said. ". . . Fermi thought that the conservative thing was to play down the possibility that [a chain reaction] may happen, and I thought the conservative thing was to assume that it would happen and take all the necessary precautions."

I don't criticize him for any sort of Pascal's wager, because 10% is a really effing big probability. Moving on...

Suppose you did assign 10% probability to hafnium triggering. You still have rest of the mini-nuke as a big conjunction

Suppose I did assign 10%. Then you cannot defend my inertia and ostrich attitude at 10% because the actual probability is lower! So make up your mind, is Fermi right to put his head in the sand at 10% or is the actual probability lower and he should be doing something else? Or are you arguing that 10% is a magical threshold at and below which head-in-the-sand is always the right response?

I think that is taking anti-Pascal-mugging way too far: if a doctor told me I had a 10% chance of dying this year of a rare disease, I would hysterically shove all the money I had at the doctor to make it go away and start drawing up my will and drafting letters for my family, I wouldn't go 'hm, this is very interesting, perhaps I should apply for more government money grants to study this fascinating possibility.'