Again, not unrealistic. Despite me never actually seeing a Pagani hypercar, I do know that they exist and that they are super fast and incredibly expensive. It's not unreasonable that the characters may have heard that there is this new (or maybe not new, maybe it's been around for a while) type of armor that the dwarves in this area make and it has this or that property. Particularly if it's better than what is usually to be had.
This isn't a terribly bizarre thing for characters to know.
It begs the question "How do you know about the car?"
It isn't unreasonable for the PCs to have heard of the armor if the dwarves want people to know, and in game they might know the armor is "super light and incredibly expensive". But in terms of game mechanics/systems it doesn't mean the players should know this "dwarven plate only weighs 20 lbs and costs 10,000 gp, and has an AC value of 19 instead of 18".
After all, do you know just how fast the hypercar is? How much it costs? And so on? Knowing the actual cost and top speed are particulars, which you might not know. And if you do, it again begs the question: "How do you know?"
As far as the spell list goes, there's also the point that the players might want to take a gander to see if they might like to pick up one of these spells. After all, 5e casters don't need to research spells - most of the classes just get new spells automatically as they level. So, if Goblin Glue is a spell that is out there, why shouldn't the players be able to ask to see it?
Because Goblin Glue isn't a spell their characters have seen before or might not even know of? This is why the chance to know each listed spell from AD&D was a good thing. Why should every caster in the game know of every spell that exists for their class?
I wonder how many DM's allow players to create entirely new spells for their characters when they level up and then are perfectly content to not see the write up of the spell until it's cast at the table. I'm pretty sure not a single DM would EVER allow that.
Some DMs might, but I know I wouldn't.
Seriously though, because the DM is responsible for the balance of their game and what is possible. If a DM homebrews their own spells for the PCs to encounter, and it turns out the spell is OP or whatever, what
WOULD be wrong at that point would be for the DM to give the players a nerfed version or something.
Presumably
@bloodtide has these spells written up somewhere. With that many, I would hope so. And, again, presumably, it's in a format that it would not be terribly difficult to hand to the players - a word doc or something similar. Maybe it's a hand written notebook. I dunno. Don't care. I'm just not seeing the point in having several hundred pages of material that is available to characters - after all, spells ARE available to characters - and then hiding it and doling it out piecemeal.
Why would these spells be available to characters if they are custom spells the PCs don't know about?
Now, the OP mentions having a bunch of themed spells (like cold spells), and I would hope that if a PC has a cold-theme such as a Silver Dragonborn Sorcerer or something, the DM would allow that player to view these cold-themed spells for that PC.
If I had created 500 spells, I'd be pretty proud of my work and I'd want to share it with my players. If nothing else, I'd want them to check my work.
That's cool, but that's you. This DM has many of these spells (presumably) to give the players "new magic" to encounter during gameplay. It adds to the mystery and wonder and I understand that. Especially spells which come from species or regions foreign to the PCs.