Chemistry - Why does a mixture of nitrous acid with concentrated nitric acid cause nitration of benzene instead of nitrosation?

You were absolutely correct when you said that nitrosation takes place.

What actually happens is that after nitrosation occurs, concentrated $\ce{HNO3}$ oxidises the nitroso group to form nitrobenzene.

Source
A Guidebook To Mechanism In Organic Chemistry; Chapter 6, section 6.2;Peter Sykes