Rambam begins Chapter 2 with the following question from a contemporary:
It would at first sight appear from Scripture that man was originally intended to be perfectly equal to the rest of the animal creation, which is not endowed with intellect, reason, or power of distinguishing between good and evil: but that Adam's disobedience to the command of God procured him that great perfection of man, viz., the power of distinguishing between good and evil-the noblest of all the faculties of our nature, the noblest of all the faculties of our nature, the essential characteristic of the human race
Rambam with his characteristically scathing wit replies,
... the intellect which was granted to man as the highest endowment, was bestowed on him before his disobedience... On account of this of intellect man was addressed by God, and received His commandments... for no commandments are given to the brute creation or to those who are devoid of understanding.
This is interesting: Rambam clings to Aristotle's concept of Man possessing a Divine Intellect, endowed at the onset of his creation, with the means to receive and understand Divine insights. Rambam maintains that God, in his Perfection, would never create a creature with a Divine purpose and a Divine Intellect yet deprive that very creature of the means to grasp or interpret any Divine Ideas! He elaborates:
Through the intellect man distinguishes between the true and the false. This faculty Adam possessed perfectly and completely... Thus it is the function of the intellect to discriminate between the true and the false--a distinct which is applicable to all objects of intellectual perception.
Again, God would never endow man with Divine Intellect that would find the objects of its meditation or comprehension unintelligible: it makes no sense and would imply God is inefficient, something hateful to both Aristotle(qualified) and Rambam.
However, if this is the case, then why was Adam OK being nude, a "manifest impropriety", before the Fall? Rambam maintains that before the Fall, Adam was still in a state of Innocence, and so while Adam had a Divinely-endowed capacity to reflect and reason on logical matters, he did not have the ability to ponder ethical or moral problems.
To get around this problem, Rambam distinguishes between Necessary Truths(logical) and Apparent Truths(moral). He illustrates this distinction with a comparison between the words emet and sheker (logical true/false, respectively) with tob and ra', which mean morally right and wrong.
Notably, Adam "transgressed a command with which he had been charged on the score of his reason":
After Man's disobedience, however, when he began to give way to desires which their source in his imagination and to the gratification of his bodily appetites... he was punished by the loss of part of that intellectual faculty which he had previously possessed.
In Adam's new state, he becomes like the elohim, "knowing good and evil". However, this created an entirely new dimension and focus of thinking: Adam acquired a "a new faculty whereby he found things wrong which previously he had not regarded as wrong." In this state, Adam and Eve would now cover themselves rather than remain nude, as before, as they realise the apparent impropriety of nudity, rather than retaining the Necessary Truth of the Higher Mind that it doesn't matter. This change proved irreversible.
Adam unwittingly chose the Apparent Truth over the Necessary Truth. Using a cogent metaphor, the Bible says, "Thou shalt eat the grass of the field" (Gen. iii 18). Adam was reduced from his previous status, as just below that of an Angel, to that just above the other animals. His greedy and insatiable pursuit of Apparent Truth led to his Fall, as "the wife saw the tree was good for food and delightful to the eyes" (Gen. iii. 6).
Adam no longer could repose in the paradise of Necessary Truth but must struggle in the barren wasteland of Apparent Truth, with only his Divine Endowment to guide him. Now, things get interesting.