This happens to me very often. I see someone who I believe is a familiar face and go over to start polite conversation. I am then met with a puzzled look in return and then I realise the person I am talking to isn't the person I assumed it was. In fact, it may be a complete stranger. I then have to somehow bluff my way out of the situation and hope the person isn't aware I made such a strange mistake.
One incident I recall a few months ago was when there was a girl with dark hair sat in a car and I just thought it was a friend of mine called Bianca. I walked over to the car window, started to chat and was met by a puzzled look. It was only the puzzled look that made me realise I had been mistaken. At such a time I always think to myself, "Oh no, this isn't such and such a person at all."
I have noticed that I get these symptoms in waves and that maybe it's an indication of any possible stress or withdrawel. I looked into prosopagnosia a little bit a few weeks ago with a very open mind and must admit what I experience is kind of hard to define. I mean, I don't know why it is I sometimes don't recognise faces. You coud, for example, show me a photo of the Beatles right now and I could tell you who was John, who was George, who was Paul and who was Ringo. Yet, in real life situation, somehow I occasionally just don't know who someone is. There was a time, in fact, that this really scared me and I didn't dare tell anyone as I figured I may have been seriously ill.
I believe there are different types of prospagnosia and that there are special tests to evaluate it. I have a strong feeling if I was subjected to such a test I could definitely distinguish faces from pics and photos. Yet, evidently, there are different types of prosopagnosia. I'm not familiar with the differences but can sort of define my own situation. I have a theory that somehow part of my brain becomes dormant while another part of the brain is very active so that somehow the visual perception does a bypass. Or something like that. What I do know for sure is it's definitely no imagined scenario. At times in life my struggle to identify people has led to very difficult and awkward situations. Such as trying to work in a hotel and not knowing one customer from another and then having to try and bluff through the whole thing.