John Wick had been retired for 5 years, according to this exchange (if you assume his last job used the Continental):
Addy: My God! How long has it been? Four years?
John Wick: Five and change.
In the mean while, Iosef and his goons never got to meet him face to face. Alfie Allen, the actor portraying Iosef, was born in 1986, and 28 at the time of John Wick 1 release. If he was playing a character his age, he'd be 23 by the time Wick retired. Possibly too young to be rubbing elbows with the most hardened assassins of his father's operation, and even if he came across him once or twice he probably didn't bother memorizing the face of another underling.
Hew and his goons were young, they might have heard the stories, but they'd never think he was the killing machine he is - in that universe no one gets even close to being as unstoppable as Wick. So when they hear tales of a badass, they'd still think he is very dangerous, but still "Only Human" as Agent Jones would put it. On top of that, people called him Baba Yaga, further distancing the myth and human. They might not even realize the tales of Baba Yaga were referring to John Wick. When they get face to face with Wick, they either don't know him, or don't remember him, and they are too young to realize the mistake they were about to make.
We get to see this again in John Wick 2, when some 2nd in command dismisses the danger John Wick presents, and the stories as old men's over the top exaggerations, even being slightly bored at the pencil story (mostly for the purpose of exposition and bringing the audience up to speed, but it goes to establish not everyone believes John Wick to be unstoppable, at least until they start wearing a bullet hole in the forehead).