Well, here's how I see it. Once he opened that trunk, and found no dead body but just a bag of garbage, I think he decided he must have been wrong. If that had been me, I think I might have just been so relieved that nobody was in that trunk, I might not have thought any further. Maybe try to convince myself that it was just garbage. I mean, George knew what human decomp smelled like, but would he know that rotting meat (for example) wouldn't smell pretty much the same? They didn't open the garbage bag - maybe he just assumed that it had something in it causing the terrible smell.
I don't think I'd necessarily make the leap to "okay, there's no dead body here now, but there must have been one recently so I'll call the police."
It reminds me a bit of a friend of mine whose doctor thought she had a tumor in her uterus. The night before she was scheduled for surgery, another doctor examined her and ran some more tests and said "no, actually you are pregnant." She was so relieved that she didn't have cancer that it was several weeks before she woke up one day and said "Pregnant? Wait! I'm going to have a baby??" The relief that the worst outcome was no longer on the table overshadowed the other part!
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