re: Does anyone actually believe this

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So, you are the source of truth?

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I've given my sources several times. I'll give them in more detail.

Geza Vermes has performed a detailed analysis of the Testimonium and modified it to remove what he considers the interpolations.

Géza Vermes or Vermès (Hungarian: ['ge?z? 'v?rm??], 22 June 1924 – 8 May 2013) was a British scholar of Jewish Hungarian origin—one who also served as a Catholic priest in his youth—and writer on religious history, particularly Jewish and Christian. He was a noted authority on the Dead Sea Scrolls and ancient works in Aramaic such as the Targums, and on the life and religion of Jesus. He was one of the most important voices in contemporary Jesus research.

James Dunn states that the works of Josephus include two separate references to Jesus and although there are some interpolations in the Testimonium, there is "broad consensus" among scholars regarding the nature of an authentic reference to Jesus in the Testimonium and what the passage would look like without the interpolations.

James D. G. "Jimmy" Dunn (born 1939) is a leading British New Testament scholar who was for many years the Lightfoot Professor of Divinity in the Department of Theology at the University of Durham, now Emeritus Lightfoot Professor. He has worked broadly within the Protestant tradition.

Blomberg adds that after the removal of these three elements (which are likely interpolations) from the Greek versions the remaining passage fits well with the Arabic version and supports the authenticity of the reference to the execution of Jesus by Pilate.

Craig L. Blomberg is a New Testament scholar. He is a Distinguished Professor of the New Testament at Denver Seminary in Colorado where he has been since 1986.

The general scholarly view is that while the Testimonium Flavianum is most likely not authentic in its entirety, it is broadly agreed upon that it originally consisted of an authentic nucleus, which was then subject to Christian interpolation or forgery

Kennneth A. Olson, Eusebius and the Testimonium Flavianum. The Catholic Biblical Quarterly 61 (2): 305, 1999

I really don't know what else I can give at this point.