No, you definitely don't play around fireball in that situation because it's impossible to play around it in that situation. If you trade both minions you still lose no matter what since he pings you to 7 the turn after and he's on 16 health. He had no single card left in his deck that would give him 8 damage for lethal on the next draw, so he gets ping fireballed the turn after anyway.

But you have to realize that just because there was no way out in hindsight doesn't mean that there isn't still a good/bad play based on the info you had that turn. That's how RNG games work, you make the right decision and still lose sometimes anyway, but it's important to know what the right play is.

The only correct line of thought in that situation is to not play around fireball because you can't win no matter what if it is fireball, then make a play that maximizes your chance of winning if it happens to not be fireball. In that case you swing face for 8 no matter what and decide if you play around the card in hand being a spell or not. If you assume not you swing face with everything and hope for 2/whatever kings kraken lethal. If you assume so (which you normally dont in arena but he played iirc 14 spells in 19 turns), you swing face for 8 and kill the frostcaller to avoid 1/3 freeze.