[Sephiroth was never that good at dealing with people to begin with. He's especially not fully prepared for his greatest 'enemy' to be having this kind of break down in front of him.]

You were subjected to Hojo's experiments. I imagine your body and mind were not fully recovered when it happened. To protect yourself and survive you locked away your grief.

[That is partly an assumption Sephiroth is making without going into Cloud's mind. He can't exactly say why he's not using this opportunity to his advantage or why he's answering Cloud's questions without malice, but apparently that's what's happening.]