The problems with the witnessed event are many. Some have been mentioned such as only hearing from one what the other remembers.
The brain turns unclear data into conclusions. That is how latent aaaack's clothes hamper became a person for a while. Once the brain receives more data it changes the interpretation. But while your brain is interpreting the clothes hamper is a person, you see details of the person that are not there. The brain takes lots of liberties filling in blanks. So any vision of "a mist" is not going to be very reliable.
In addition, your brain also regularly changes memories. This has been shown in the many studies that provide evidence that eye witness testimony in criminal cases is plainly unreliable. Also, people have been tricked to create memories that the researcher instills. Once the subject adopts the false memory, it becomes a real memory to that person.
The story is interesting. Many of us have fun stories of weird things. But unfortunately the explanation is usually uninteresting.