Of course Mycroft knows. Part of the whole reason he has come here is so that he may sit and have a meal with his husband and his brother, who is the only person in all of London who can be allowed to know the true state of his and Watson's affairs. Holmes doesn't blink, though he does set his fork down and lean back in his chair, sufficiently ignoring Watson's choke. He's used to them enough by now.

"Yes, Watson is a very dear friend to me still even after my disappearing spell of late. I am very fortunate to have him, as he is even about to resume rooming with me at Baker street."

He delivers all of this information in the most casual, matter-of-fact way, but what he really is doing is telling his brother that he is in a stable relationship with Watson and that things are going wonderfully, and that he is really very happy. He can deliver all of this with choice facial ticks, inflections, a turn of hand, a twitch of his lips. If his brother can read anything, it's Holmes's subtle body language. He knows because he is fluent in Mycroft's.

"I must thank you for passing along my messages, and for maintaining our rooms for us while I was away."