Miles reveals Jacob hoped he was wrong about Ben, knows about Nikki & Paulo

At the beach camp graveyard, Miles comes to visit Ben who is digging very slowly and in small amounts. Miles offers him some food, but Ben offers him the $3.2 million he asked for in season 4. Ben says that he can get off of the island and has a large network of people who could get the money if he'll just free him. Miles says that he doesn't need the money because Nikki and Paulo are buried in the graveyard with $8 million worth of diamonds.

Ben then protests on a moral level, asking if he's going to stand by and let him be murdered for killing Jacob who didn't care if he was killed. Miles then reveals that Jacob did care. Miles says that up until the knife went through Jacob's heart, he hoped that he had ben wrong about Ben.

So it seems that Jacob expected Ben to kill him, but was holding onto a glimmer of hope that he wouldn't. Instead of trying to stop Ben, it seems that Jacob allowed him to make his own decision.