Sources indicate that he contacted prosecutors and offered to testify, but in exchange requested immunity from an ongoing drunk driving and domestic abuse case with which he was charged in June. Prosecutors declined his offer and chose not to call him as a witness in the Rittenhouse case.
The prosecution probably knew his identity but kept it hidden so his background wouldn't come out.
According to this source, that is the case.
IANAL, but to me this looks like a clear-cut Brady violation. Add it to the list of the DA's violation of Kyle's constitutional rights.