Jenova.Rebirth has it right.
Here's how it worked...
Or how it was supposed to work.
(SPOILER)Cait Sith speaks in a rural accent, quite distinctive. This is the 'hillbilly' accent he uses more often, later in the game. Reeve, however, speaks in a very reserved and formal way. Then, just before the Sister Ray is used, Reeve's in a fluster, controlling Cait Sith and trying to argue with Scarlet and Heidegger as well, and he accidentally slips into his "Cait Sith voice", which is what prompts Barret's comment, "you're busted, Reeve!"
But yeah, apparently it works better in the Japanese script. Pity, really, since it's quite a clever idea. Maybe if the English translation got a few more tweaks...