No, he just didn't know. Takatora would've flipped if at any point he found out that his younger brother became part of their human experiment (and he did flip out and manhandled Sid when he found out). Plus, while he may or may not have saw Mitchi, he must have recognized his voice. The time he transforms and during the fights. In the series, the only reason Takatora didn't find out Mitchi was in the Ryugen armor was that Mitchi was careful to not say anything and give himself away. Long story short, there's no way this would fit in the actual timeline. Not to mention the several additional lockseeds the characters get in this.
So I say don't bother trying to fit this into the show's timeline. I just assume it took place sometime before episode 9, and leave it at that:anime:.
My thoughts on this movie? It was pretty fun. My only major gripe is the abundance of deus ex machinas in this thing(you can make a drinking game out of it, geez...). There are several little things in Wizard's part that I didn't like, but story-wise it was surprisingly well-thought out(though I still don't like Wizard's whole take on "hope" and "despair"). Also, this part highlights the fact that Koyomi and Haruto's relationship was supposed to be a major part of the show. It's kinda bad that the only "Haruto and Koyomi bonding" moment you can get is that one time Haruto took her out and brought her a hat. That scene really needed more stronger, deeper moments of character interaction, and it's a shame the show didn't have them other than that one time in the first five episodes when Haruto took Koyomi out for a "notdate".
Gaim's part was pretty fun too, especially the cameos. The movie had me replaying bits with Zangetsu because it's one of the only times we see Takatora kicking ass in his Melon Arms. I like how the story in Gaim's part is basically trying to make sense of the Warring States era of Japan, and why it had to happen.
I find the final fight kinda weird. They're fighting a giant tree, and...burning it, which is, environmentally speaking, not...good:sweat:. That part of me kind shook its head a little.