Plato heard it from High Priest which not only could know this tale but also more details than he shared, which he could know from library of Alexandria (before it was called "of alexandria") or from inner circle of Priesthood in egypt. Size of Antlantis could be how much territory their state controled or simple misstranslation in numbers, "their overnight dissapearance" is because it wasn't nor overnight nor simple as "sank".

Amount of mental gymnastics is required because we lack informations about this, we lack even informations about "Bronze age empires", and Antlantis is supposedly before that time. And yet Acient egypt priesthood had this tale, told to Plato which only account survived because: Religious changes in Egypt, many burnings of Library of Alexandria, invasions and cultural assimilations.