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- May 21, 2008
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I'd be happy to answer that for you.
To be clear, Shinra sees Cloud and says:
"...Long time no see? Oh... you. You're the one who quit SOLDIER and joined AVALANCHE. I knew you were exposed to Mako, from the glow in your eyes... Tell me, traitor... what was your name?"
Shinra probably had reports on the members of AVALANCHE beforehand, counter-intelligence if you will. It stands to reason he had some knowledge of the 'terrorist cell' especially one that walks, talks, and looks like a SOLDIER. Also, Cloud is still wearing Zack's SOLDIER uniform, he has Zack's Buster Sword and he fought alongside Zack for some time, so he can appear to be a very much like a real SOLDIER. A SOLDIER joining an anti-Shinra terrorist group would definitely get the President's attention. Since the President clearly isn't interested in who they are (The next line he says is "I can't be expected to know everyone's name, not unless you become another Sephiroth.") he hasn't dug very deep in their identities. He's going to kill them soon anyway, so there's no need to know more about them -- if he had ordered further investigation to their identities, he could possibly find out that Cloud is not a SOLDIER, but this is unlikely, since any Shinra reports of Cloud would have officially stated he'd died in Nibelheim, or on the outskirts of Midgar.
So as far as he's concerned, Cloud is just a rebel SOLDIER, and one he will kill soon at that.
Ah that makes perfect sense. Never even took that into consideration. You're so awesome, thanks for answering my question!