Is the sentence "我知道它，但是我忘了“ unnatural?
Both "我知道它，但是我忘了" and "我知道这个，但是我忘了" sounds unnatural to me. I have no idea what you are talking about until I saw the English explanation: I learnt it sometime ago, but have now forgotten it. To me, the most natural way to say this is to say it with details, like "我知道这个，但是我忘记具体的内容" (I knew this, but now I forgot all the details) or even "我记得我看到过这件事，但是其他的都忘记了" (I know I have seen this, but I cannot remember anything else about it).