Yes, but they also know he died eighteen years ago right before Avatar Korra was born. You must be from the past, too.

[Wan glanced around to make sure no one was passing close enough to overhear.]

Look, the people of this time know their Avatar is Avatar Korra. You can't go around talking like Avatar Aang is alive. Even if he's been brought to this time like you and I have, it's important that most people don't know that. Unless Avatar Korra wants them to, okay? You understand that, right?