[[ It’s not…quite an honesty meme if it’s not phrased directly at Itachi, this quantifies as requiring an OOC answer. Like you gotta ask Itachi a question directly.

It would likely go in this order.

1) Itachi thinks that Sasuke is trying to pull a fast one with the transformation, even though Itachi has already told Sasuke that he was only “playing” the role of big brother.
2) He would proceed with an attack, assuming he could force Sasuke out of the transformation and back into the real battle.
3) Once it became clear Sasuke doesn’t have the strength, speed, or stamina to dodge the attack, and this isn’t a reversible transformation, he would stop at the last second. 
4) That means blocking the rest of Sasuke’s attacks because it’s not a fair fight.
5) You mentioned Sasuke was still very angry, so while Sasuke might be reduced to his seven year old body, I’m probably gonna safely assume he still has all of his memories.
6) Itachi would likely flee the battle and find a way to inform Konoha of his location to pick him up, since he trusts them with Sasuke’s safety. 
7) His plan would be ruined, however. His body is deteriorating. He can’t live another 9 or so years of waiting. He would die before Sasuke has a chance to get his revenge. ]]