If the cognition was totally incorrect, leading to beliefs unrelated to the outside world, it would be only a waste of energy to maintain such cognitive capacity. Correct beliefs about certain things (like locations of food and predators) are without doubt great evolutionary advantage.

Not sure what kind of cognitive capacity the dinosaurs held, but that they roamed around for millions of years and then became extinct seems to indicate that evolution itself doesn't care much about cognitive capacity beyond a point (that you already mentioned)

Can you explain the meaning? What are the former and what are the latter beings?

You are already familiar with the latter, those whose consciousness is biologically determined. How do you expect to recognise the former, those whose consciousness is not biologically determined?