When you are Projecting, if you meet someone and they are consciously interacting with you, it is highly likely you are indeed dealing with them direct. If they appear drunk, or groggy, or seem like they’re hallucinating, then they are dreaming, but it is still them. It is very unlikely (but possible) they will remember the interaction later. If they are conscious, then you are in luck, as they are either consciously Projecting or Lucid Dreaming. But unless you are specifically looking, it is not really that common – most people will just be dreaming.

“[In sleep], the entity is in contact with other entities at a subconscious area.”
– Seth,Seth, Dreams and Projections in Consciousness p.46

On the other hand, it is possible to interact with your projected idea of someone and mistake it for the person themselves. People can also act in uncharacteristic ways in dreams because they have more freedom there, this does not mean it’s pure fantasy. If you are lucid enough you can will such dream characters to disappear, and any that remain are probably real. With a little lucidity experience you can usually tell the difference anyway.

Overall, the answer is not clear-cut either. Any consciousness can project portions of its identity quite easily in the Astral, each retaining an integrated individual focus, which later returns to the main consciousness, adding to its overall ‘experience bank’. In that sense we are all ‘gestalt consciousnesses’, and the unlimited nature of the Astral allows for experiencing any number of things ‘at once’.

So when you dream of someone, you may have attracted them into your dream experience for your own reasons, and depending on how extensive and involved the interaction, you may be dealing with their main identity or a projected portion. Or again, you could be interacting with your own invented idea of the person. Such distinctions are made by personal experience, no theory that explains away everything as one thing can ever fit.

It may or may not matter anyway. The likelihood of anyone other than other conscious Projectors or Lucid Dreamers remembering the interaction is very low since many people do not even bother to remember their ‘normal’ dreams. Fewer still all their normal dreams, and so on. I’ve had some very clear mutually experienced and remembered ‘normal’ dreams, but these have been very rare in comparison to later intentional experiences.

There is also the problem of finding points of correlation later, as everyone has their own dream interactions from their own unique perspective, and dream objects and environments can be perceived and interpreted in highly different ways. Interaction content may vary also due to memory and interpretation of its non-verbal nature. I think the subjective nature of these experiences is far more interesting than any search for objective proof of their validity, though this does happen irregularly anyway.