Hebrew syntax is no rocket science, but imo the NWT is on the unlikely side on this one.
The main point is that it is an optative clause, introduced by the preposition lu'.
When lu' is followed by the "imperfect" tense (generally implying a present or future action), it is usually the expression of a still possible wish, e.g. Genesis 17,18, "(by all means) let Ismael live before your face," "if only Ismael could live..." Job 6:2, "if only my vexation were weighed"...
Otoh, when lu' is followed by the "perfect" tense, as in Isaiah 48,18f, it is rather a "wish on the past," that is, the rhetorical expression of something which should have happened (but did not). Here in the protasis, it seems to express an unfulfilled condition with its unreal consequences in the apodosis -- e.g. If I had known (protasis) I would have done otherwise (apodosis) => actually I didn't know and I didn't do otherwise. In French we call that mood irréel du présent, which my French-English dictionary painfully translates as "mood expressing unreal condition".
Other OT examples of this construction, lu' + perfect (from Joüon's Grammaire de l'hébreu biblique, § 163c), Numbers 6,2 "Would that we had died in the land of Egypt! Or would that we had died in this wilderness!" (=> we have not); 20:3: ""Would that we had died when our kindred died before the LORD!"; Joshua 7:7 "Would that we had been content to settle beyond the Jordan!"
On edit, other examples of the same construction with a similar
unreal implication, Judges 8:19: "if you had saved them alive, I would not kill you." 13:23: "If the LORD had meant to kill us, he would not have accepted a burnt offering and a grain offering at our hands, or shown us all these things, or now announced to us such things as these." 1 Samuel 14:30: "How much better if today the troops had eaten freely of the spoil taken from their enemies."
But the other option, although exceptional, is not altogether impossible, e.g. Isaiah 63:19/64:1, which also has lu' + perfect and which most translations interpret as a present (although somehow "impossible") wish: "O that you would tear open the heavens and come down, so that the mountains would quake at your presence..."
That the "rule" is not strict is well shown in Psalm 81:14(13), which has
both tenses in parallel lines: "O that my people would listen (perfect) to me, that Israel would walk (imperfect) in my ways!"