iOS: Newly added contacts get hidden and don't sync to iCloud
My guess is "unknown" is somehow the same as "On my Mac."

If you go to Address Book / preferences / accounts, do you see "on my mac" or "unknown?"

If so, if you can disable or delete it (if you're sure your contacts are all on iCloud).

That will get rid of the duplication and if/when you add a new contact on your Mac it should go up on iCloud.