The news comes after it was revealed that the estate of Judith Dim Evans, a late Holocaust survivor, is suing the film's makers.
Evans’s family claims she had no idea about the true nature of the film and that Baron Cohen was "mocking Jewish culture".
According to Deadline, a source close to the film's production says that not only did Evans know what the actor was doing, but there is footage of her being told.
The report says that this is the first time Baron Cohen deemed it necessary to fill in his subject on who he actually was, and that Evans knew he was "playing an ignorant character as a means of Holocaust education".
Cohen has also reportedly ensured that viewers of the film on Amazon Prime Video will be able to watch a separate clip of Evans talking about her experiences in the Second World War.
According to legal documents obtained by the Atlanta Journal-Constitution, Evans, who died this summer, was approached in January to talk about the Holocaust for what she believed was a legitimate documentary.
However, the film – which is dedicated to Evans – was in fact Cohen's comedy sequel.
The lawsuit was brought by Evans’s daughter Michelle Dim St Pierre against Amazon Prime and Oak Springs Productions.
She is requesting that Evans’s scenes be removed from the film and is seeking damages of less than $75,000 (£57,000).
Borat 2 is out on 23 October. Baron Cohen can currently be seen in Aaron Sorkin's Netflix drama The Trial of the Chicago 7.