Why do you think no one outside of Galra command knew about Lotor before S3? At no point in S2 did the BoM or Slav or the other allies go "And once we kill Zarkon, we have to deal with his son too". That seems an odd oversight.
I mean, Lotor is very young by his parents’ standards and entered the scene as an exile who was unpopular to even speak of. There was nearly a coup at the very prospect of him taking the throne and especially given exile in question it seems likely he was out-and-out shut off from interaction with the fleet- that his armor and his generals are not things that give him away in s3e1.
That opens up a few possibilities:
- The Blade was not aware of Lotor, not hard because of the exile and how completely overlooked he was by Zarkon. Lotor would be a fairly well-kept secret by the simple fact that it’s considered unfashionable to speak of him at all and he’s very unlikely to have been relevant to discussion before now. After all, the information seems to have moved mostly around high command, when we know the Blade’s seeming only operative at that level was Thace.
- The Blade knew about Lotor but didn’t really consider him a threat because with Zarkon’s utter lack of support of Lotor as heir and no real litmus to judge Lotor’s ability to outfox people, it was fair to assume he wasn’t a contender who would hold up very long and the empire would rip itself apart over succession. The latter would suggest that Lotor basically Mark Anthony’d his way in- “yeah, Zarkon apparently has a son but everyone’s barely heard of him and he’s an exiled teenager, probably not dangerous”