It's not a matter of fear, it's a matter of survival. ultor know's he probably won't win against two morphers, and andalite nothlit, and a yeerk traitor. Besides, he never wanted the fight that Jazar and kildor started, it wasn't part of his plan and it wasn't the right moment. Ultor sees it as a retreat and isn't really worried about fooling the morphers anymore. That is why he ran through the woods screaming that he was a yeerk and that he needed back-up.