Malcolm couldn't have met Thea when she was 4 months old. After his affair with Moira, he spent 2 years abroad and Thea would've been over a year old when he returned. Oliver should remember these events, considering he's 9 years older than his sister and Malcolm's neighbor/son's best friend.
After Olivers cuts of Malcolm Merlyn's hand and names Nyssa the new Ra's, the camera cuts to show the league members kneeling to her, and Malcolm on the ground with both hands intact.