Is the usage of "more frequently" or "more often" correct in this scenario?
Solution 1:
This is yet another scenario whose analysis requires appreciation of the distinction between semantics and pragmatics. So far as semantics is concerned, yes, if you think that an event does not take place at all, but it, in fact, takes place once, then it is true that it takes place more frequently than you think. That is a straightforward logical consequence of the indubitable mathematical truth that one is greater than zero.
However, so far as pragmatics is concerned, such an utterance would be infelicitous, odd, out of place, in spite of being true. Saying that something is more frequent than something else, implicates that both things do actually take place. While in some special contexts (particularly scientific ones) it may be useful to speak of not taking place as taking place with the frequency of zero, this is not what people would say in everyday exchanges.
Similar questions can be raised, and similar answers given about whether, for example, an object that moves slowly is faster than an object that stands still, or whether something unlikely is more probable than something that is altogether impossible.
The OP's example is, however, further complicated by the fact that it says 'the event does take place once', without making it clear what the timeframe is: once a year, once a century, once in a lifetime, once in all eternity. If it means once ever, then its frequency is infinitesimally small, which renders it additionaly problematic to say that it takes place more frequently.