The end notes on the wikipedia article about the SS Cap Arcona appear to answer your question and give sources for further investigation.

From the Till report of June 1945: "The Intelligence Officer with 83 Group RAF has admitted on two occasions; first to Lt H. F. Ansell of this Team (when it was confirmed by a Wing Commander present), and on a second occasion to the Investigating Officer when he was accompanied by Lt. H. F. Ansell, that a message was received on 2 May 1945 that these ships were loaded with KZ prisoners but that, although there was ample time to warn the pilots of the planes who attacked these ships on the following day, by some oversight the message was never passed on... From the facts and from the statement volunteered by the RAF Intelligence Officer, it appears that the primary responsibility for this great loss of life must fall on the British RAF personnel who failed to pass to the pilots the message they received concerning the presence of KZ prisoners on board these ships."

See: Benjamin Jacobs and Eugene Pool, The 100-Year Secret: Britain's Hidden World War II Massacre. The Lyons Press, October 2004. ISBN 1-59228-532-5 and Noel Till, Report on Investigations, WO 309/1592

The full name and location of this "Till Report" should be included in the bibliography of this book.

As for why liners would be sunk, many liners were co-opted by belligerents during WW1 and WWII as fast troop transports. While serving in this role, unless marked as hospital ships, they were considered military targets.