It doesn't sound ridiculous to me. Japan had invested so much blood and treasure in the "China Incident" that I imagine even the emporer would have been reluctant to withdraw to cut losses and appease the U.S. Plus, I'm not sure Roosevelt was all that interested in getting the Japanese to "stand down."
And that is exactly the argument the Japanese Army used to convince their emperor to make final approval of the attack on Pearl Harbor.
As for President Roosevelt, I've seen no evidence that he was seriously interested in making peace with Japan -- interested enough to offer the Japanese something they wanted (i.e., non-aggression treaty) in exchange for peace.
Indeed, by early September of 1941, Roosevelt had publicly all but declared all-out war on Nazi Germany, and only needed a significant attack on America to convince Congress the time had come to do its constitutional duty.
So, maybe the Japanese could be pushed into making a major "mistake", just as Commander McCollum had advised back in October, 1940.
By the way, whenever you see the names McCollum, Rochefort, Layton or Watts, remember they are the "gang of four", long-time close buddies who worked together to pull this whole caper off.