You are absolutely right but.........Quite a few schools won't say anything about injuries, citing HIPAA concerns. I don't know what Michigan's policy is, but there's certainly no reporting requirement like in the NFL.
For all the wrong reasons, college coaches have an incentive to cover the spread. I wish I could find the article somewhere, but there is some good evidence that one factor why college coaches run up scores in games is because alums increase contributions somewhat notably after the team covers spreads (NB: i don't remember if this is an immediate effect or an "over the course of a season" effect).
If Peppers was truly questionable and UM fails to cover, particularly if they lose and fail to cover, I think Harbaugh will hear about this.