This situation reminds me of this one philosophy thing. I forgot who it was. Let's just say it was Socrates. The scenario is something like this:
Socrates says in front of a crowd with his students present that he is the biggest fool.
The crowd believes him and goes "Ah, he is a fool."
The students nod their heads and say "Ah, look at the crowd misinterpreting. Socrates is teaching the crowd by telling them he is a fool even though he isn't."
Socrates says in his mind "Yeah, I am quite the fool."
Basically the lesson is that people close to someone can misunderstand what that someone is actually communicating (even though it is clear what they are communicating) because of their own perceptions that filter/distort what that someone is communicating. Just like these two throughout every one of their interactions in this chapter.