He just cocks an eyebrow up at the expression on Zerxus' face. It's an oddly formal expression for a man wearing nothing but a pair of pajama pants, even if he's sitting behind a heavy desk in his own extensive library.

"It isn't a gesture. I'm not stupid, and I do respect him."

There's something in there about 'then you learn about-' that is sending up red flags about Zerxus' level of interest. Nothing he's chosen to do here feels safe. This feels much more dangerous, and much more telling about his potential motivation in being in Gotham.

I don't think it's exactly a concession. I think he's trying to understand you, and figure out how to predict you.