Summarizing briefly from the introduction to the translation and analysis by A.V. Paribok:
The ancient parts are Book 2 and parts of Book 1 -- most likely written in Punjab (North-Western India) about 0 CE. The language of the original was probably Hybrid Sanskrit.
Book 1 (the narrative introduction) was evidently expanded and elaborated at a later time, ...
The source is Miln III,7,8 .
The other day, I happened to read a discussion of this passage in "Development in the Early Buddhist Concept of Kamma/Karma" by James Paul McDermott (page 113-114).
Based on what I have read, I do not believe that there is any specific quote in the Suttas / Vinaya that specifically supports this passage. The Suttas (AN 6.63)...
Venerable Pesala's translation is greatly abridged. We read it recently in our study group and while it's quite good, he leaves out a lot of interesting passages. I recommend if you have time to read the full translation by Rhys-Davids. It is very old, but well done I think. We eventually switched to the Rhys-Davids version to read all the similes at the end....
Ven. Pesala's translation has a footnote to clarify the meaning:
"All wrong-doing is rooted in ignorance, so one who does wrong knowingly will feel remorse and correct himself sooner than one who is deluded (Editor’s Note)."
So based on his note, "knowingly" here means knowing that the unwholesome deed does create unwholesome results.
With regard to karma one of the most cited Pāli passages is:
Cetanāhaṃ bhakkhave kammaṃ vadāmi - AN 6.63
Intention, monks, is what I call action.
In other words, only intentional actions are karma. On the other hand Jains considered that all actions whatever were karmic. They developed the idea that inactivity was the best religious practice, ...