Go here to see the diagram of the scenario illustrated with this comment:
“The green guy and the blue guy share some contextual knowledge (“X”).
This tricky green guy also shares different contextual knowledge with a red chick (“Z”).
Mr. Green encodes the “mixed message” specifically to play on the contextual disparity between Mr. Blue and Miss Red. Even though the received message is identical, Mr. Blue sees an entirely different meaning (“X”) than Miss Red (“Z”). Yes, Mr. Blue may read the letter “Z”, but it has no contextual meaning to him.”