I believe, based on experience, that both cases are true. This isn't an either or situation. I believe that pedophiles can and do often misinterpret the actions of children, and I believe that other times they interpret the actions correctly and in ways that society wouldn't imagine possible.

As for the first statement, I would definitely not go so far as to call it delusional because this simply does not fit the criteria for being called a delusion. However, many BLs do seem to have a tendency to read more into the actions of boys than what is actually there. I do not believe this is unique to pedophiles. I believe this is a phenomenon common to all of humanity. People oftentimes see what they want to see. I've observed straight people do the exact same thing many times. I've heard countless straight people misinterpret the signs someone they like is giving them and make fools of themselves by acting according to their misinterpretation. This type of misinterpretation is actually so common in society that it has been overused as a plot device on tv to the point that it has become a sort of cliche. How many situations in real life or even just on tv haven't you seen that involve a guy misinterpreting the body language of a girl and doing something stupid like making an advance only to be rejected because they had misinterpreted everything all along? I have found this to be a very common situation. I don't believe it is unique to pedophiles or that pedophiles find themselves doing this more than the average person.

As for the second part of your statement, that's true too. Sometimes pedophiles are not reading too much into situations. Sometimes it is society that is blind to what is going on. I've observed this type of situation many times as well. Society doesn't view children as sexual beings, so it is easy for it to miss all of the signs and simply not even imagine that such could happen.