Do you think that official monsters are better balanced? I don't think that is a universal truth.Yes, because I know many 3PP creatures and such are not well-balanced to the game IME.
Should your PC know things about monsters they have not encountered yet beyond (probably wrong) rumors and legends?Also because I see most D&D settings as fairly unified. I know (for the most part) what to expect and look forward to it. If a DM commonly uses creatures they made up or from 3PP then it breaks immersion for me--I suddenly find myself in a world I don't recognize even though my PC should in general.