I've known several people in my life who have resisted the need for surgery. As long as they view it as optional, they try to avoid it, even if they have had successful surgeries in the past. Sometimes, it requires multiple doctors telling them they need surgery to live before they are willing to go under the knife. No matter what the procedure is, no matter how routine, there's always a chance you don't wake up.
It would not surprise me if Jermaine O'Neal has a phobic reaction to surgery and that his willingness to come back for one more season hinged on a belief that he could avoid surgery. I do think it's possible that he would have retired if surgery was absolutely necessary.