The confusion between the original question and the Answers & Comments previously given stems from a misunderstanding by the Asker (a younger me). Because things seem distinct by our perceptions even when someone understand all things are foundationally One, there can be confusion between ① the names of (seemingly) differing deities and ② different epithets for the same deity.
Here are two examples:
- In Judaism, ʾĒl ʿElyōn ("God Most High") is understood to be an epithet for YHVH, not another name for YHVH nor the name of another entity altogether.
- In Shaivism, Trilocana ("Three-eyed") is understood to be an epithet for Śiva, not another name or deity. In fact, "śiva" itself was originally an epithet for Rudra.
In a philosophy that describes all things as unified as One epithets can evolve into names. And, when one thing has multiple names it can easily be confused as being multiple things. Nārāyaṇa was an early epithet meaning "(that which) abides (within the) waters."
The waters are called narah, (for) the waters are, indeed, the offspring of Nara; as they were his first residence (ayana), he thence is named Narayana.
—Manusmṛiti: chapter 1, verse 10
Though this epithet predates the name Viṣṇu, both refer to the same entity.
Thus, the statement, "Nārāyaṇa is Para Brahman" is the same statement as, "Viṣṇu is Para Brahman." I'm not certain "how people saw Nārāyaṇa and Brahman as distinct," but I suspect that the concept of Nārāyaṇa was understood by people before the concept of Para Brahman. I believe so because aspects of reality relating to the elements are always understood by humans before more ideological concepts such as "that which is beyond all descriptions and conceptualisations." People had to understand each concept individually before they could understand them as the same thing.