I love Hosea (he's my fave) but one thing that's always bugged me is how he's definitely the most moral member of the gang but he still stays with Dutch after he kills that girl in Blackwater. I can't help thinking that'd be the last straw for Hosea...
If it's any consolation, there's nothing to suggest Hosea actually knew about Heidi McCourt. As far as I know, there's no encounter or cutscene where it's explicitly stated. In fact, an argument can be made to the contrary.
In chapter two, during a confrontation with Dutch, Hosea says "I heard things got nasty on that fairy", but he doesn't say how nasty. He then proceeds to ask Dutch to elaborate, but Dutch deflects, just as he deflected in Colter. Arthur flat out asked him what happened in Blackwater and Dutch responded with, "We missed you, that’s what happened." With Hosea, he quickly ends the conversation by telling him to "be strong".
That isn't the first time Hosea digs for information about Blackwater either. He later confronts Micah, asking, "Just what exactly went on in Blackwater?" This interaction is especially sad because Hosea basically begs Micah to answer, but the little rat brushes him off. Now, whether Hosea was asking why the the job went sideways or what the gang did in response is certainly up for debate, but his conversations with Dutch lead me to believe he might not know about the murder.
And in all fairness, that does seem like something Dutch would proactively try to hide, since killing innocent people is supposedly against their "code". Not far from the camp, you can even find torn up wanted posters detailing Dutch’s crimes, though it’s anyone's guess who destroyed them. One interesting detail, however, is that after Trelawny warns Arthur about the situation in Blackwater, he only tells Dutch about the wanted posters, not Hosea. I tried several times, but to my knowledge there’s no dialogue for it. The only gang member who wasn't in Blackwater who explicitly finds out about Heidi is Arthur, told to him by Javier when they ride to save John. Arthur never repeats this information to Hosea.
However ... as I like to deal in facts, the fact of the matter is Hosea could know just as much as he might not. It does seem a little farfetched to think Hosea never saw a single wanted poster, never heard someone talking about it, or simply wasn’t clever enough to piece it together on his own. Plus, Agent Milton does show up at the camp and call Dutch “nothing but a killer” while Hosea’s standing right next to him (though he could just be talking generally).
That said, I think Blackwater was the last straw, regardless of Heidi’s murder. After the botched robbery gets three gang members killed and the rest of them running from the law, Hosea blatantly tries to convince those remaining--Abigail, John, Sadie, Tilly, Lenny, even Arthur--to leave and "go legit". Hosea's reached a point in his life where all he has left is Dutch and the years behind them. He knows he's close to death, terminally ill, a wanted man, and he feels like sticking it out is a type of punishment for his own crimes. He declares several times throughout the game that he "wasn't a good man" in his youth, and he acknowledges (unlike Dutch) that gunslingers are part of a bygone era. He accepts this and literally says "I'm ready" when he talks about dying.
For further evidence of his sense of remorse, when talking to a frightened Abigail he says, "Seems we don't have any choice but to ride this train to the end of the line." He points to himself, and by "we" I think he means him and Dutch, as he immediately follows it up by telling Abigail to take Jack and start life anew somewhere safe. There's also another conversation (if you play on low honour) where he unambiguously says he wants to "make amends", but he feels like it’s too late.
In addition, I don’t think it’s a stretch to say Hosea’s slightly afraid of Dutch. During almost all of their arguments, Hosea recoils when Dutch approaches/yells at him. If you watch a compilation of their arguments, you’ll notice that when things get heated Hosea steps back, walks off, or looks at the ground submissively. He’s probably well aware of Dutch’s temper and knows what he can do when he’s angry, which tends to be the case when you've known someone for nearly thirty years. It isn't until chapter four, Hosea's last chapter, that he becomes more assertive and pushes back. I really do believe Hosea was more than just a friend to Dutch; he was also his conscience and a bit of a leash. As Hosea’s health waned, so did his influence on Dutch, unfortunately. I think he knew leaving the gang would only make things worse for everyone else, so he stayed.
In the end, whether or not Hosea knew about Heidi is kind of inconsequential, because there's nothing he could've done about it besides what he tries to do in game: muzzle and undermine Dutch, plan adequate heists to ensure everyone's future, and convince his friends to move on, be better, and accept the ways of the new world. In a sense, Arthur became Hosea by the end of the story.
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