actually the people in my dreams often don't have faces just kinda smudges where the face would be, but I always know exactly who they are and nobody is bothered by it
It's like guest. I know who they are (unless I'm not supposed to in the context of the dream), but I don't know how, they don't have faces and up until today I just assumed that was the case for everyone.
Really interesting question! Basically, a specific region of the brain lights up when looking at human faces and we think that this area holds a "face map" that plots every face you've seen based on characteristics. Our eyes tend to linger on things we haven't seen before, so even if someone doesn't consciously recognise a face, their eye movements can indicate that they're familiar with that face. Lots of cutting edge face research is just coming out using fMRI and eye movement tracking.
It's a fun area of research, Prosopagnosia is one bit that's really interesting. It's when an individual can't recognise faces, they just can't. Like they know a voice and clothes and hair but even seeing someone's face multiple times won't make the brain catalogue it so it's like they're seeing a new face every time.
You could have seen them there.
No need to get worked up over such minor thing.
There are worse than nightmares.