you mean to say that he will be more happy if a movie he made bombs at box office and is not recognized during awards season than the contrary ?
No, of course not. But that's not what you asked:
Doesn't he know that it is next to impossible for overwhelmingly democratic Hollywood to give best actor ... no matter how good he plays the role? ... So why did bale undergo such insane transformation ?
You asked why he would do it. I pointed out there were reasons beyond awards and box office (and noted that your beliefs about the potential of the role are arguable, anyway). He's not being presented with a choice between money/awards and "the contrary." He has to choose between films not knowing which will be successful, or in which ways, and factor in which roles he might find challenging, fulfilling, or historically significant, if he's the kind of person who cares about his legacy.
A better question would be: would Christian Bale be happier making a lot of money in a blockbuster, or making very little for a role he finds personally challenging? And the answer is, I don't know, and you don't either, but he does seem to give the latter a lot of weight. So it's reasonable to assume that matters to him at least somewhat.
I just think he developed a thick skin where he realized that many of the top auteurs don't want to work with him and so he decided to take on risky projects in every way to point of bordering on career killing roles.
You can "think" that if you want, but I have no idea why you think you're capable of broadly psychoanalyzing actors' motivation from so little information. You're basically just guessing.
Machinist is not the kind of movie nor the kind of director that you would loose ton of weight for unless your career hits rock bottom in the direction you wanted and you are just trying to prove a point that you are just as dedicated as any other actor out there.
...which, if true, means you've answered your own question about why he might take the role: because he likes challenging roles that require dedication, whether they're likely to make money or win awards, or not.