It is clear the captain did know that BLKMO was not just a waypoint over the sea but an island, because when the CVR picks up the ALTITUDE call out, she says: "Eh just a small little island.... that's BLMO itself" So the question is how did she know it was an island, and what information about its height did she have? Did she have good enough information, but had misinterpreted it? She clearly did not realise it was 300ft high.
Furthermore I find it very surprising that you'd track over what you knew was an island at night at 200ft at all - and if you did, you would surely have made a comment in advance to the crew to expect an ALTITUDE alert - and what clearance on the radalt to expect, as it was so little. But why would you not just climb to add some clearance for good measure? There was no reason not to.
What little CVR talk there is gives me the impression this crew were not completely sure of the terrain ahead and were relying significantly on radar and possibly EGPWS to provide information to keep them safe.
As is clear from a considerable number of the 980 posts on this thread, both radar and EGPWS have their complexities, that mean that one has to be very knowledgable about them in order to be able to 100% rely on them to be able to avoid obstacles flying at 200ft at night.
Which brings us back to the madness of this approach - it must surely have been totally unnecessary to carry it out at 200ft from so far out, over known islands at night. Getting into Blacksod safely in the prevailing weather should not have been a particularly difficult task for this helicopter. Basic flight planning with identification of a sensible let-down path and monitoring position with nothing more detailed than a 1:500,000 moving map was all that was required. And they had this and much more.
It should not have absolutely needed a formal approach (though admittedly very advantageous) or more equipment on the aircraft. It seems to me that a danger of too much external control with SOPs and sophisticated aircraft equipment to rely on, is that, whilst having clear and obvious benefits that we need, risk is increased in one way by reducing the amount of original thinking and decision making pilots undertake. So they can easily get worse at it, as probably happened here.