> You could say there is little overlap between people who are good at basketball and those who say they are good at basketball.

Right, one could make that statement. It would be silly, but they could make it. I think most people who consider themselves good at basketball are probably better than average at basketball.

> That statement does not have any effect on your ability to judge them by watching them play.

Is the notion that someone who's not good at basketball can't recognize a good basketball player?

I'm a little confused by your metaphor.