I was watching the marvel bromances ep of Cinema Therapy and Peter's decision to not rekindle Ned's and MJ's memories came up. Now, from what I know of fandom opinion regarding that, thoughts on that choice range from "he was protecting them" to "he didn't respect his friends' choices" to "JUST LET HIM BE HAPPY GOD MARVEL WHY-" I'm here to throw another one into the ring, cuz the Cinema Therapy guys didn't discuss it and someone needs to.
Trauma.
This boy. Has been through so much. Everyone he cares about has been hurt or lost in one way or another. His parents? Dead. Ben? Dead. Tony? Dead. May? Dead. Happy? About to be arrested. Michelle and Ned are the only two left at this point, and they were both in danger by associating with him. Michelle prob got a new lil scar.
Peter fully intended to tell them everything. He walked into that diner, he'd practiced, he had written down what he wanted to say. He was 100% going to do it.
Then he sees the bandage on Michelle's temple.
These are the only two people he has left. He wants them safe and happy and loved. But, he risks that by telling them and bringing them back into his life. If he brings them back into his life, into Spider-Man's life, he risks their lives. And Peter doesn't want to lose anyone else. The loss of Aunt May (and Tony, probably, given how FFH and NWH were back-to-back) is still fresh. And that bandage is a visible reminder of the risks of bringing them back into the circle.
"I can't lose them," he thinks. So he pushes them away before he can.
It's a trauma response.