I think the reason Sunset didn't know about it is because of how top secret the details of the games need to be. They close off whole parts of the school in order to prepare for the events and they "won't even let them see" what the courses for the events look like. There's no way to prepare. There's no communication between the schools to prepare either. It's like the schools never wanted to be friends in the first place.
I don't think it matters when Sunset joined the school or if the students would have talked about it or not. Everyone would know about it due to photos being taken and displayed in yearbooks and around the school (proven by Rainbow Dash). Having the games every 4 years (instead of just having the games for every senior class) means there are YEARS of students unable to participate, thus not showing an accurate representation of academic growth OR of friendship.
We have an exact representation of how many years Sunset has been at CHS, we have seen the number of years she's been the Fall Formal Princess, the movies start with her senior year Fall Formal. If they are all in the same class, then this is the LUCKY class of seniors who got to compete. Forgotten Friendship shows them all working on their yearbooks and Rainbow Dash talking about how she will be remembered. It's vague, but it emphasizes the feelings of graduation. Then they all get summer jobs and don't go back to school? Sunset has been there for going on her 5th year, so the class behind the Humane Seven when they were freshmen (4 years behind their graduation year) were able to compete.
All Principal Celestia needed to say was, "Since we keep the Friendship Games exclusive to the senior class, we're sure a lot of you are unaware of what goes on during the games" and Sunset could have said, "I guess I was too busy...not making friends...to even notice there /was/ a Friendship Games". Everything about the games themselves inside of a school setting makes no sense