That seems rational right up until you question whether or not the charismatic/psychotic gangster will just lie low and let Fring live out the rest of his life until Walter White takes him out.
Further complicating things is the fact that, like Nacho, Lalo is another person that Saul namedrops while being held at gunpoint, which could suggest that Saul believes he may still be alive.
At the end of the aforementioned “Something Unforgivable,” Lalo has a would-be assassin inform his handlers that the job was done and that Lalo is dead – which ultimately could explain why Gus Fring is under the impression that all of the Salamancas are wiped out.