This is a crucial fact for understanding what Mincemeat was designed to accomplish. It was not designed to convince the Germans that the Allies would strike somewhere completely unexpected. It was designed to shift the weight of German expectation from Sicily, which was obviously plausible, to Greece and Sardinia, which were also plausible and which the Germans already had reasons to worry about.
The difference between “Sicily is probably next” and “Sicily might be a feint covering Greece” was not a difference of zero and one hundred. It was a difference of degree, of confidence, of urgency. If German planners could be made to think that the available intelligence evidence pointed equally to Greece or Sardinia, they might hedge their defensive resources. They might position reserves in ways that kept them out of Sicily. They might, crucially, be slow to respond when the actual attack came because they expected it to be a preliminary move before the “real” assault elsewhere.
This is what the British deception planners were trying to accomplish. Not the impossible task of making Germany ignore Sicily entirely. The more achievable task of making Germany less certain about Sicily, more worried about other places, and therefore less prepared to concentrate overwhelming defense where the blow would actually fall.
The JIC — the Joint Intelligence Committee — was aware that German intelligence was actively analyzing Allied intentions in the Mediterranean. British signals intelligence, through Ultra, had insight into what German assessments were concluding. This gave the deception planners a feedback mechanism: they could see, in real time, what German analysts believed, and they could assess how successfully any deception was shifting those beliefs.