The exact chronology is still a bit vague to me but Rand would have appeared to be doing exactly what Demandred was doing, sitting back with an elite Travel capable force as a reserve unit. There was no other reserve and Demandred would have correctly assumed it would be insane not to have one, and the composition he picked - his trusted Aiel plus a commander and chunk of forces still recovering from brutal fight, would scream 'strategic reserve'. And him showing up to help fight would reinforce that. Demandred had every reason to believe once he committed his own Travel-capable force that Rand would commit that reserve.

After that though shayol ghul was dream-spiked and Demandred would have good cause to think that if Rand was already at Shayol Ghul his hopes for personal, fair combat would be done with, even if the DO didn't just order him to do it he'd know Graendal or Moridin would attack as soon the chance came up. One of the complaints that's been going around is that the characters were acquiring knowledge off screen, and that is amongst people who like and mostly trust each other. The Forsaken don't trust each other, lie casually, and are all plotting to enslave or kill each other. Graendal and Moridin had zero reason to tell Demandred about the attack on the Blasted lands, they know he'd have packed up to chance Rand leaving their non-Travel-capable forces stranded under Taim or Moghedien, neither ever mentioned as having battlefield command ability, whereas Demandred is openly acknowledged to be very good at it and the only person left who was with Sammael and Be'lal dead.

But look at it from Demandred's POV, he would have little choice but to continue hoping it was misinformation if he did hear because he'd find out that Rand's forces there were fighting a holding action and Rand was in the mountain already. He wouldn't get a fair fight there, he'd expect that the DO or Moridin or Graendal would interfere and he'd expect the DO, if the DO wanted Rand dead, to Order him to try to blow Rand away with every gun he had, fair or not. So if he had heard about it and wasn't certain he'd have to keep plodding on assuming it wasn't true because he loses if it is. Plus he had 'proof' Rand was running the battle, because he couldn't accept Mat was running the show. Truthfully he would assume Elayne was Rand's mouthpiece, the teenage girlfriend-queen as real supreme commander? Not too believable.

So he had cause to believe Rand was present and every reason (personal desire not to and logical cause) to doubt contradictory evidence if presented. There's some strain of credulity but not a lot, especially compared to a lot of the other things we had to accept a hand-wave on.