What the Japanese did not know was that their codes were still being read by US Navy intelligence. The entire plan was made available to the American commanders, who knew that Ozawa's decoy force was just that and the other forces would concentrate on the transports. Admiral William "Bull" Halsey knew that Ozawa was the decoy force, while battleships would try to attack the landing ships in Leyte Gulf while he was chasing the carriers.
Which makes Halsey's actions that much more glaring. On October 20, 1944, MacArthur landed in the Philippines. On October 23 two US Submarines spotted the Japanese Decoy Fleet and sank a carrier. The few aircraft from Ozawa's force announced themselves with an air attack, sinking the USS Princeton, a light carrier. On October 25, the second unit entered the Subian Sea and was met by Vice Admiral Thomas Kinkaid commanding the veterans of Pearl Harbor, raised from the mud. In a classic example of night fighting, scores of torpedoes from PT boats and destroyers and shells from the battleships slammed into the Japanese force, sinking everything but a destroyer. The Americans' slow old battleships, with new radar, had outfought the slow old battleships of the Imperial Japanese Navy. But the Americans were now low on ammunition and remained in place, not falling back to protect the transports.
Halsey withdrew the next day to the north after Ozawa, thinking that Kinkaid's battleships were covering the transports. Halsey knew that Ozawa was the decoy force, and he knew that another more powerful surface fleet was coming from Japan. Nevertheless, without consulting Kinkaid, who was were he was supposed to be, Halsey tore after the Decoy Force, anxious to sink the Japanese carriers with 16" shells from his flagship, USS New Jersey.
That afternoon, the transports were at anchor on Leyte, with just escort carriers, light carriers built on transport hulls, to screen them. The shock of seeing the tall "pagoda" masts of four battleships, eight cruisers, and thirteen destroyers led the Americans into a desperate tactic. Making smoke, the escort carriers and their destroyers attacked the much larger ships, firing torpedoes. Kamikazes, suicide planes, made their debut, crashing into and sinking the USS St. Lo. Other escort carriers were hit, and three destroyers were sunk. Nimitz, in Hawaii, sent Halsey the question, "Where is the Third Fleet?" to which Halsey's radioman accidentally added part of the dummy code used to confuse Japanese radio listening posts - "the world wonders." This embarrassed and infuriated Halsey, who turned around at raced for Leyte Gulf.
Confused by the smoke and under severe air attack, the Japanese Fleet withdrew, and lost the Musashi on the return to Japan. With just six capital ships left, the Imperial Japanese Navy would never again take to sea in significant numbers. Halsey was embarrassed, but soon recovered and went on to higher glory as the naval equivalent of US Army General George S. Patton.