This is of course just me speaking for my own opinion. Naturally you're free to disagree, but I thought I'd just offer another perspective on this point.
I'd argue that Dooku didn't actually incriminate Palpatine specifically. He did present it as the "Republic was now under the control of the Dark Lord of the Sith" he went on to frame it as...
"Hundreds of senators are now under the influence of a Sith Lord called Darth Sidious."
That's not the same thing as saying the Sith Lord is in the highest chair of the senate or that he was in direct control of everybody like the Supreme Chancellor would be. Especially when you consider just how many systems are actually in the Republic. With the opening crawl stating that "Several thousand solar systems" were joining the Seperatists or Dooku later stating "ten thousand more systems will rally to our cause with your support" to the Separatist Council as if that would be a notable shift but not everybody. Also of note, they knew that the Sith were involved with if not influencing the Trade Federation prior without being directly in command of them in the traditional business/political hierarchy.
It would still be a dangerous and frightening precedent, thought it would naturally depend on what ones he would have gotten. He was by all accounts telling the truth there, having direct power over them of course being a form of influence and thousands are comprised of hundreds, but I don't see how things weren't obscured enough to keep the Jedi guessing. It's done in a similar fashion to how Palpatine twisted around truth to manipulate Anakin or Obi-Wan contorting the story of his father to Luke in order to get him to fight Vader. In all cases they were loose with the details in order to push their intended listener in a certain direction. All using half-truths in a bid to pit certain people against each other. And as shown in ROTS, part of Palpatine's plan was to present the Jedi as enemies to the Republic which could've happened had they believed what he said, and later Windu kind of does when he declares the Senate and Courts too corrupt to be trusted when deciding to strike Sidious down.
I talked about it in my last post so I won't go into detail here, but there was also learning that Dooku himself was a Sith Lord or at the very least a Dark Sider, something he was not forthcoming to Obi-Wan about, after he was talking about trying to destroy the Sith which I don't think would make have made believing him any easier.
Sure the Jedi didn't really trust Palpatine prior, but at first at least that seemed to have more to do with not trusting him by virtue of the fact he was a politician. (The highest ranking one at that) As Obi-Wan puts it when talking to Anakin about the Senate...
"It's been my experience that Senators are only focused on pleasing those who fund their campaigns...and they are more than willing to forget the niceties of democracy to get those funds." And of the Chancellor himself, "Palpatine's a politician. I've observed that he is very clever at following the passions and prejudices of the Senators."
It's a distrust that Padme refers to when talking to Anakin on Naboo with the, "You really don't like politicians do you?" question. And prior Anakin himself when defending both she Palpatine during he and Obi-Wan's talk about politicians feels the need to assert that they are "different" from the others. It's arguably a distrurst that would also help convince Mace that he had to circumvent due process and kill and unarmed Palpatine later in ROTS. Though by that film given all the further executive power he's been given throughout the war and eventually going to far as appointing someone to the Jedi Council himself they did decide they needed to spy on him directly.
In all fairness I can see an argument to be had about Mace's line, "I sense a plot to destroy the Jedi. The Dark Side of the Force surrounds the Chancellor." Even though Mace is later surprised to learn the truth with his, "A Sith Lord" exclamation after Anakin tells him about it. You could bring up how the Force is in all life without exceptions and intrinsically tied to emotions. Meaning you could theoretically be a bad man, something they did see him as, which would surround you with it but not wielding the power of the Dark Side.
Also notable is how the Jedi were intentionally portrayed as being detached and directly stated as arrogant. Yoda puts it as, "A flaw more and more common among Jedi. Hmm. Too sure of themselves they are. Even the older, more experience ones" during their conversation about Anakin. The only ones who don't go to quite the same degree as the others seeming to be he and Qui-Gon Jinn. We see it with how Obi-Wan speaks of those he refers to as "pathetic lifeforms" in TPM. We see it with the Jedi Council later in the film when they are skeptical not just about the Sith returning but how they could do it, "without us knowing". Similarly Windu and Ki-Adi-Mundi immediately shrug off the idea that Dooku could be behind the plot to assassinate Amidala by virtue of the fact he was a once a Jedi. Windu elaborating on that with, "He couldn't assassinate anyone. It's not in his character." Or there was the keeper of the archives Jocasta Nu who asserted, "If an item does not appear in our records, it does not exist!" when hearing the idea that the Archives could be incomplete. Mace shows arrogance later in that film when he's confident his brigade of Jedi could take on Dooku's army with the retort, "I don't think so" to Dooku's assertion that they are, "impossibly outnumbered" which proves to be right given that the Clones need to fly in and save them at the eleventh hour.
A lot of that is united in the idea that at the start of the trilogy the Jedi believe they are on top of everything in the galaxy. Being relatively unchallenged for a millennia could do that. But even with the Dark Side clouding their vision they'd refuse to believe that under their watch over the Galaxy the Sith could get so far. Obi-Wan says as much during the scene where Dooku speaks to him in his cell with, "No that's not possible. The Jedi would be aware of it." And even after hearing more of Dooku has to say he plainly states, "I don't believe you." At every stage they are skeptical until undeniably proven wrong. Like them only coming around to consider the possibility of the Sith being around after testing Anakin where they begin to think that he could very well be the Chosen One due to his power and potential, whose purpose is said to be destroying the Sith. And it only becomes confirmed for them after the final confrontation with Maul. They refused to believe that one of their own like Dooku could have possibly fallen as far as he did until the investigation into the assassination plot led back to him and unveiled his villains intents as well as his embracing of the Dark Side. Or Jocasta's assertions about how Kamino couldn't possibly exist without being on their records until it is discovered and the subsequent investigation spirals into the Clone War. And they didn't believe the Sith could have attained such direct influence over the Republic until their spy reports a confession after which they decide to confront him themselves.
They seem to grow a little wiser after the Battle of Geonosis when they agree that a closer eye needs to kept on the Senate. And later when they decide that there may very well be more going on with Palpatine than bog standard political corruption when they decide to want him spied on. And Mace does turn out to be correct with his assertion of there being a plot to destroy the Jedi. Though they arguably didn't wizen up as much as they needed to, given that they were still taken off-guard that Palpatine was the Sith Lord. And of course by then it was arguably too late to be able to stop him and buckling to the pressure Windu succumbed to sacrificing the Jedi Code at a pivotal moment.
So it comes down to the question of whether or not the Jedi made the right decision to try and play things a bit safe but not full buy what he was saying. Or perhaps more accurately, a decision I could blame them for making. And really, I don't know how I'd answer given the circumstances of who they heard it from and what they'd learn about him. But either way the idea presented was that the Jedi should have been less conceited in their waning power and been more wary of something like this happening and yes I believe should have ultimately been able to look more inwardly for the Sith. And they did make an agreement to watch the Senate, who Dooku was incriminating in a broad sense anyway rather than Palpatine in specific. I personally don't think the plot point concerning Dooku all that terribly handled myself.
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