As the title say how can I know when someone means to say ist oder isst?
Pronunciation is the same. You know by context.
Yes, I can't think of many or any situations when you could actually confuse it.
Perhaps in the sentence, "Sie ist meine Tante." But the likelihood of someone eating your aunt, well...
But then isst would be stressed to indicate it is something obscure and unusual.
As mentioned in the tips and notes, there is not difference.