Sutra 1.8 refers to wrong knowledge or false understanding. Viparyaya. “Misperception arises from knowledge not based in truth.”
False understanding is mistaking something for something else. It’s different then imagination because it’s rooted in reality. These are our miscommunications. Our assumptions.
We all see the world through our own eyes and have a different perspective on what has happened based on our story and our projections. Sometimes the truth as we believe it to be is not the truth that others believe it to be. We all have a different version of what we believe to be the truth. Seeking out clear sources of right knowledge (sutra 1.7) is our solution. Coming back to the self and reflecting and practicing and learning: how is my truth different from their truth?
This is yoga.