A third possibility is to immediately set up a similar situation as a training opportunity. Put the meatball right up to her nose, move a few feet away and call her to come. Lure her with the treat if necessary—anything to get her to come away from the food the man is giving her, and then reinforce her for doing so. Then, allow her to go back to the treat man to get whatever he has. Allowing your dog to get both reinforcement from you and what she gave up in order to come to you makes responding to your cue a winning situation all around. Setting up winning situations for your dog over and over again in all sorts of contexts is what proofing a dog for a cue is all about.
During training, have something better than what she gave up so she learns that coming to you is always worthwhile. This means that if someone is giving her liver biscotti, you give her chicken. If they are giving her a lot of nice petting attention, you give her a belly rub. If they are luring her with an ordinary ball, you reinforce her with a super bouncy ball.
In terms of your question about dogs really “getting it”—it’s hard to know for sure that your dog is proofed to respond to a cue in any situation if you have not explicitly practiced and trained her to handle a variety of environments. That said, the more situations and types of distractions in which your dog has learned to respond to the cue, the more likely it is she will respond appropriately in a novel context. Eventually, all situations are sufficiently similar that she can be said to be “fully proofed” for a particular cue. Some dogs get there faster than others, but for virtually every dog, it takes a lot of practice in a wide range of situations involving different places, with different distractions and from different distances.
For more information about canine learning, the best book on the subject is Excel-erated Learning: Explaining in Plain English How Dogs Learn and How Best to Teach Them by Pamela J. Reid, PhD. For specific advice on teaching a reliable recall to your dog, the best resource is the video Lassie Come! by Patricia B. McConnell, PhD.