There are some interesting comments about how other languages do it in other threads.
Here’s one more idea - is this person present or not during the conversation
Edit to expand on the idea:
We can have 3 pronouns
Person participates in the conversation
Person doesn’t participate but is somehow involved with speakers and conversation (like talking about a friend, or a customer that bothered you at work)
Talking about someone in an abstract sense. Like when writing about a celebrity, or a biography, or describing someone’s life (even if a friend)
There are some interesting comments about how other languages do it in other threads.
Here’s one more idea - is this person present or not during the conversation
Edit to expand on the idea:
We can have 3 pronouns