Probably they weren’t (thinking), or at least not very well. I do accept that the separatists initially believed they’d nailed another transport...
But if they thought about it a little more they would have to ask themselves why is a transport plane at that altitude heading east within 3 minutes of Russian territory.
And after doing this these incompetents then want to be recognized as the governing authorities in that area.
I agree. They had the system where it was because they had figured out that the transports were flying over that area and they were waiting on transports. So, they saw a transport and let fly. Kiev cut it's own throat putting out the BS that the Separatists didn't have anything but MANPADS and couldn't use anything else if they had it. They knew better and if they didn't, their everything their "Intelligence" pumps out is as likely BS as anything else.
They must have a real problem with pilots telling their superiors to "stuff it" or "fly the mission yourself" if they put that trash out to keep the pilots in the dark.
If it was purely for propaganda reasons to try and convince people Russia was involved more than it is, they're just completely stupid, not stupid enough to lie to their own pilots is all. Admitting the Separatists had and could use systems like that was more likely to get outside countries involved to force a truce before something like this happened, though, so instead of making Russia look worse, they made themselves look like they're either stupid from top to bottom or bare faced liars at the top.