Ask Lemmygrad

There's a really good essay on Red Sails which discusses this in some detail.

https://redsails.org/masses-elites-and-rebels/

The tldr as well as a short answer to your question is that the propaganda may be seen through, or at least suspected as exaggerated in some way, but it doesn't matter because it matches up with a person's real and perceived material interests.

I can't speak for people broadly, but if I compare to how I was before I had the views I have now? Honestly, a lot of it is pure erasure. The alternative never even gets seen. It wasn't like for much of my life, I was presented with two views with equal airtime, rabid imperialism/colonialism and anti-imperialist communism, and I had to choose which one made more sense. It was more like I was largely presented with one view, which was some amalgamation of western supremacy, white supremacy, and binary good/evil view of the world, where the west was honorable and doing its best against the barbarian hordes of bad ideologies. I didn't necessarily have it presented in those explicit terms because that would sound too blatantly racist for liberalism's sanitizing delivery of a worldview, but that's probably how I'd put it looking back on it now.

Some part indoctrination with some part apathy, wrapped in self-aggrandisement.

People are raised into the propaganda obviously, and that plays a role but I think it is exacerbated by the fact that people often have no real desire to look into if it's true or not. That is the more insidious element. Anyone who actually put two minutes of thought into the claim that Koreans push trains to work everyday would realise it can't possibly be true, but they don't put those two minutes in. If they think about it at all, they just go "Oh, North Korea is so crazy, look at them. lol". They'd much rather have a crazy mystery country to meme about AND to consider themselves better than. They get to feel superior while pretending to be empathetic to an oppressed people.

A lot of liberals are very eager to feel superior to a marginalized people while simultaneously pretending like they care. Propaganda that feeds into that is unlikely to be questioned because they actively want it to be true.