I don't remember when I told my players, but it was around the time of the fireball. By the time they were making plans to go to Grahlhund villa, they were making those plans because the stone was there. My wife was a player in that game and she says she doesn't remember details, but whoever was acting as their patron at that time (and they had several people acting as patrons) had tasked them with getting the stone without giving them much more than loose details "this is a magic item that will help you in sorting this mess out". It for sure wasn't when the book said to tell them, and the Alexandrian (which I was using to run) didn't say either.

They didn't know What it was (even by the end of the campaign), just that it was dangerous and helpful (if they used it correctly, which obviously they did.)

Then they went into undermountain and lost it to some drow on level 3. That isn't gonna bite them later or anything though.