You haven't explained to me why. It was directly stated and Jiraiya is the main source of information that Konoha has on the Akatsuki. The guy literally infiltrated Pain's village. The lengths he goes to attain information makes it seem rather credible if he's getting well-within the source.
The first part doesn't make sense. Orochimaru wasn't in the Akatsuki until after he left the village and the last time Jiraiya saw Orochimaru was when he attempted to get him to stay in the village.
You still haven't explained why he would display such a technique to somebody he didn't trust. It doesn't make sense, nor does it make sense to reveal his best technique to somebody he knows he's going to fight sooner or later.
Implying that Itachi was actually scared of Orochimaru.
>Itachi defeats Orochimaru
>Orochimaru remains a member for no reason
>Itachi defeats Orochimaru again
>Orochimaru remains a member for no reason
>Itachi defeats Orochimaru again
>Orochimaru remains a member for no reason
>and again and again and no one else, not Kisame, Pain, or Tobi, ever finds out
You're basing
that idea on a scan from part 1? Can you provide that scan?
Orochimaru's attack on Itachi has been referenced in part 1 and shown in part 2, there's not even a mention of anything else. Once Orochimaru was defeated, he had no reason to stay in Akatsuki. So he left.
Sigh. Itachi could've seen it on a joint Akatsuki mission seeing how they were a mercenary force before Bijuu hunters, or he could've gained info on it from a raid of one of Orochimaru's hideouts. I've already explained why Itachi wouldn't use Yamata no Orochi against Itachi and why Fushi Tensei is the only necessary thing to keep secret. But you ignored it.
I'm not implying Itachi was scared, you idiot. I'm implying that your proposed scenario is just silly.