What was Big Willy Shakes going for?
Falstaff tells us "the better part of valor is discretion." Translation: it's better to keep quiet about some stuff and pretend to be strong and honorable. That way, people think you're all tough when really you're a wimp. Basically, it's just a fancy way of getting out of being a coward (by, you know, being a coward and keeping it hush hush).
But let's look at who's saying this. Falstaff is a bragger. He talks himself up to anyone who will listen. At one point, he even tells a story about fighting off dozens of thieves all by himself. All the while Hal and his buddies were just playing a prank on him. He's got a loud mouth and he's never afraid to tell people about his victories (or his pretend victories either).
So why is he so tight-lipped in this scene? Well, that's just it: he's a bragger. He's all talk. He doesn't know how to fight, and doesn't see the point in trying. He tells us that honor and valor will get you nothing when you're gone. So why bother?
He justifies that lying is okay if it keeps you alive. According to him, valor is all a lie as well anyway. It's really just an image of what you are, not reality. His philosophy is that he'll find opportunities in life to make people think he's heroic, even if he's not.