Why did they pretend to not know each other?

I think they were scared! I believe they'd both thought they'd live longer if they didn't anger her psycho hubby!

I think it was just a case of neither of them quite knowing how to react in the moment they see each other again. Their relationship clearly didn't end on good terms and I'm willing to bet Johnny was banking on never seeing Gilda ever again after they split up. Her then suddenly turning up - not just in Argentina but also as his employer's new wife, of all things - clearly threw him. And Johnny being friends with Ballin seems to be a bit of a shock to Gilda too; she'd probably just intended on getting rich off Ballin's money, but as soon as she realised Johnny was back in the picture, she very quickly switched her plans towards getting him back. Ballin basically unknowingly threw both of them in at the deep end by surprising them both with his "introductions" before either of them had the chance to fully understand the situation and individually work out how to deal with it; neither of them knew how much either of them had potentially told Ballin about their former relationship and so were basically just going for the natural option of acting like strangers because...well, honestly would you really willingly tell your boss/new husband that at some point in the clearly not-too-recent-past you used to be in a relationship with his new wife/best friend? Especially if you happened to already know that the man was quite possessive and perfectly capable of being violent?

As it is, the entire issue of them pretending not to know each other is kind of rendered moot very quickly since it ultimately takes Ballin less than one night to work out the basics of the situation - he explicitly tells Gilda he understands the situation between her and Johnny as soon as they're in private, and drops more than enough hints to Johnny that he can work it out for himself. So the pretence essentially lasts only for the scene where Ballin "introduces" them to each other and when they're out at the casino. After that, the only pretence is that neither of them wants the other back.