I think I would approach the family and ask them how THEY would want to be treated if they were the ones with the illness. I'm willing to bet the majority would want to be told, for reasons listed above by Morticia. Maybe if you talk to them and present your friends side they may reverse their decision and take the time to say what they would like to say rather than pretending nothing is wrong...It's got to be worth a try for his sake.

If they still insist on the deception your conscience will at least be clear knowing that you tried on his behalf.

Like has already been said, I think he knows instinctively...