Amon/Fandaniel was the one who obliterated Zodiark. The Watcher was about to just reseal Zodiark after you subjugated Him. As Fandaniel himself points out, it really wouldn't have mattered what you did there, because either Zenos or himself would have done the deed either way. He just wanted to take advantage of the opportunity to eliminate you as a threat to his plans while he had Zodiark under his control.

Trust isn't normally an issue in Amaurotian society, as is pointed out to you on Elpis. Whenever someone accesses their memories, they're literally baring their soul, in a manner of speaking. You were Echo flashbacking all over the place in Poieten Oikos, such that the truth would have been self evident to anyone who bothered to look. That's no small part why the tone of that scene is so somber, and why your 'ridiculous' story hits home. Everyone there knows in their heart that you're telling the truth.