I think the transponder light is a bit of a red herring. It only came on for a brief period, and he was already going down at that point. There's no indication that the crew believed that they were under radar control.
The same applies to the advice that visibility was 40 miles. The captain wasn't led astray by that, because his cloud/ice comment came after, not before.
As to sector whiteout, #1AHRS has confirmed that it was well-understood by polar aviators. In other words, the phenomena was not discovered by Vette. In fact, it was referred to in the Chippendale report. Given that, why couldn't Capt Collins have had a general understanding of the problem, either from his own private reading or from his time in the RNZAF, or both? The point is that he was obviously aware of the potential issue re VMC, despite not having been briefed on it.