Did negotiators know 35,000 tons meant compromise?

Did treaty negotiators know that a 35,000-ton limit would force a compromised modern capital ship?

Yes. Recent ships and designs were already larger, so the compromise was foreseeable and politically accepted.

Recent capital ships and projected designs had already exceeded the proposed ceiling, so diplomats and naval officers could see that a strict 35,000-ton ship would surrender capability. The answer to the recurring student question is an unambiguous yes: the limit could not produce the best modern capital ship the signatories knew how to build. Mass rifle procurement offers a contrast, since an 80-percent solution may be rational if it equips an entire army at a fraction of the cost. Capital ships were built in twos or fours, carried hundreds of people, and could decide a campaign, making deliberate compromise a different kind of risk. The tonnage ceiling was a political arms-limitation choice rather than an accidental naval-architecture error.