She knew he could potentially still be evil if he wanted to, but up until the deal with Adam, he showed no real inclination for it.

...apart from joking about starving people, wanting to eat Xander, giving Riley the thumbs up for trying to kill her, stealing Xander's stuff, promising to tell Faith where they were hiding and watch her kill them all, scaring people into giving him money...

He clearly still wants to be out there doing evil stuff, and he makes no secret of it. If Buffy hasn't picked up on it before Adam, she's not very bright.