Verse 9

9.  Even in the dream state,  again,  what is imagined by the mind within is verily non existing;   what is apprehended by the mind outside is existing,  so people differentiate,  but in reality,  the unreality of these two is actually seen or,  experienced.

" Even in the dream state,  again,  what is imagined by the mind within is verily non existing;"

In the dream state what is imagined within is explained here,  and is generally accepted,  as being unreal.  This acceptance of the unreality of dream is due to the appearance of the phenomena of mountains or long distance travel being experienced within the sleeping body.  This has been discussed.

"what is apprehended by the mind outside is existing"

What is apprehended by the mind in the waking state is experienced as having logical existence.
In the waking state all entities persist with their appearance,  in unlimited space,  as properly having material existence.

"so people differentiate"

This observation by Gaudapada,  that people discriminate between the unreality of dream objects,  and the reality of objects experienced in the waking state although seeming logical,  is for the reasons being stated by Gaudapada nevertheless due to delusion.
In the case of objects experienced in dream,  these are seen to be unreal due to that dream state being unreal.  while dreaming,  within the dream state,  the belief in that dream was a delusion.
In the waking state,  the dream state can be seen to have been unreal due to experiencing unreal,  impossible things,  like mountains while in bed.
Therefore,  once the seeing of  "our consciousness"  as it were,  residing within  "states",  as it were,  logic should tell us that whatever is perceived within any  "state"  is prone to delusion.

"but in reality,  the unreality of these two is actually seen or,  experienced."

This  "reality"  that Gaudapada refers to is the reality that arises due to the fact of the singularity of Existence,  Advaita.
Due to the nature of non-duality,  the nature of reality is eternal and immutable.  The experiencing of  "states"  of consciousness is a delusion.  Therefore whatever is experienced  "within"  those   "states"  is also therefore a delusion.  This delusion of existence is proved by the witnessing  "actually seen or,  experienced"  of beginning,  middle,  and end of all things.