Maybe its identification is classified. E.g. the speaker is implying "i cannot confirm or deny whether this is identified"

Literally yes, but when the UFO hunters go out, there's a fairly implicit 'Alien' in front, or at least 'Secret military'.

But seeing as this is from the military, it makes it more implicit that it's alien.

Linguistically it suggests it might be identified or identifiable, which belies the whole first word, unidentified, of the acronym. It's not just silly, it's an oxymoron.

They possibly knew what it was?

Because probably for most people UFO means flying saucer.

They both saw it and didn't see it. OMG, it was a quantum UFO! Those aliens must be advanced as hell.