The alternatives are:
1. They knew something happened, but didn't know what it was or what it should be called.
If the reason is 1, then the result is un-troubling because without a vocabulary to label the event it is easy to to understand whey they "know it not."
Much more troubling is reason 2. What if the baptism of fire is an event so subtle it could escape detection? And if that is the case, then how is one to know when or if they have experienced it?
Some writers have made the baptism of fire such a remarkable event that it connotes salvation, even exaltation itself. For those who accept that definition of the event, then to reduce it to an undetectable occurrence seems to somehow diminish it.
Joseph described the effects of the Holy Ghost on a Gentile (purges the blood and remakes them into an Israelite), and on a descendant of Israel (pure intelligence). [I'm not going to give the cite from the Teachings of the Prophet Joseph Smith, because I don't have a copy with me while I'm writing this. So you look it up.] Both effects Joseph describes could be felt in a minimal way. Neither would require it to be dramatic.
"Fire" is a description of quickening, purging sin, and receiving the love of God. [Beloved Bridegroom gives a great explanation of fire as a symbol of the love of God.] If you are living in conformity with such light as you have been given, receiving this kind of "fire" would not necessarily be physically detectable. The real place where it would begin to show would be as a person prays, and then begins to receive answers, or "pure intelligence" as Joseph put it. "A sudden flow of ideas," which the recipient knows is beyond their capacity to think of or accomplish, would be another way in which the recipient would recognize its presence.
I think it is altogether possible for either explanation to be true. No matter which explanation, I don't believe it diminishes in any way the importance of this baptism of fire and the Holy Ghost. It is, in my view, the event marking the beginning of the process by which someone becomes ultimately a new creature. It is not the end of the journey. I would use other words to describe that.