We absolutely did not know that cloth masks would help. We (incorrectly) thought that anything less than a N95 mask would not help at all, and so that is what was communicated. Since then we have done a lot of science and have learned that while N95 masks are a lot better than, say, double-layered cloth masks, the latter are still much better than nothing in slowing down infection rates.
We also were very focused on the effects for the wearer of masks. We were not focused on the effects of a possible spreader wearing the masks. Part of this was that all of the previous pandemics had diseases that people were symptomatic when they spread the disease. With Covid-19 we have a disease the mostly spreads when people are a-symptomatic. So the potential spreaders are the ones who most need to be wearing masks, and since we can't tell them apart, we need everyone in masks.
All of these things are things we learned along the way. Harping on the CDC (or others) for not knowing them is just wrong. For some of the references here please see:
https://www.wired.com/story/the-teeny-tiny-scientific-screwu...
Haven't the horrors of history given enough examples? The ends do not justify the means. Lies like this have most definitely already backfired hard. Anyone who thinks they are some special elite who is entitled to lie to the public for the greater good is wrong, evil, and unfit to hold any sort of power.