Through the inquiry process, awareness comes to realize that (a) thoughts are not true (not an accurate reflection of existence), (b) believing in thoughts causes suffering, (c) there is an alternative (awareness not identified with its content is spacious, clear, responsive), (d) the thought/statement can be turned around in any and all ways (to ourselves, its opposite etc), and each of these new statements are as valid as the initial one. They help us recognize and integrate projections, and unstick from any particular view.
So when there is a contraction, something in me looks for the thought that something else in me believes in, recognizes that it is not true and causes contraction/suffering, recognizes the space, clarity and responsiveness that is always there, and (if it is on a word level) turns the statement around.
Recognizing the process and consequences of believing in thoughts in myself, I also recognize it in others. And realizing that the process far less substantial than it may appear in myself, I also see it as much less substantial in others. Instead of thinking “they are angry at me”, I realize that they are just believing in a thought, which in turn causes them suffering. And this makes it much easier to deal with the situation as it is, simply, with less extra.