Do we know for sure that Michael really is "good" now?
I think there's a good chance he's still on Team Cockroach, but I'm not at all convinced he was being selfless in turning down this amazing promotion that's everything he ever wanted. He was being promoted, sure, in order to oversee a greatly expanded version of the fake Good Place neighborhood.
Since Michael hasn't been able to actually make that work in 803 tries, trying to get an expanded version right on the first (or at worst second) try when it's much higher profile and has the attention of this "High Council" would be next to impossible for him. When he fails to make it work, it may not even matter whether they realize he lied about all the reboots or not; he'll probably be in for "retirement" either way.
Even if he didn't care about the humans at all and is only looking out for himself, trying to find a way out of there is still his smartest move. If having the humans and Janet could help him do that, then so is saving them. (It would probably buy him more time, since examining their brains like Shawn said would probably reveal that their minds had been wiped a whole lot more than once.)
I think Michael probably is basically "good" now, especially after the Janet & Michael episode... but just putting it out there that if they go with a Michael's-loyalty-twist, it wouldn't need to contradict this episode.
It is, and if Michael had managed to make this neighborhood work, then that would be a possibility... but he couldn't.
Ooh, but wouldn't that just be an amazing way to redeem himself and eventually earn his way to the real Good Place-- creating and running a Bad Place neighborhood that secretly redeems humans and makes them eligible for the Good Place? If ever there were a way for a demon to earn his way into the Good Place, doing that-- all the while risking getting caught by the Bad Place authorities-- would be it!
If Eleanor, Chidi, Tahani and Jason haven't improved as people enough to get into the Good Place yet, maybe they could be "in on it" in the opposite way from the demons in the neighborhood-- pretending to just be other Good Place neighbors, but secretly guiding the new humans towards redemption. Wouldn't that be an interesting way to spend a season? Wait, what am I saying, this is The Good Place. Wouldn't that be an interesting way to spend a few episodes?
Yeah, Michael's expression at the end of this episode kind of torpedoed my theory that the Good Place would gladly take anyone to save them from torture. (Though I guess he could be sad if he thinks the humans will be let in but he won't.)
Either way, since there's at least one more season, we know they haven't actually won and won't actually go to the Good Place right away. The humans (well, Tahani and Chidi) were just being way over-optimistic. Since Michael even said that getting to the Good Place would be difficult and take a long time to arrange, he could even just be sad that they're so excited when he knows (and so should they based on the info he gave them) they have a long way to go yet.
But of course, it's The Good Place, so I expect his expression actually heralds some kind of twist, and not just emotion based on what we already know.