You can tell by the verb ending.
If the verb ending is the same as the infinitive (for present-tense verbs), then it must be "they" (or, if capitalised, perhaps also formal "you") -- e.g. "Sie essen Fleisch", where "essen" has the same shape as the infinitive "essen" (to eat), is "They eat meat". (Or: "You eat meat".)
Otherwise, especially if it ends in -t, then it must be "she": "Sie isst Fleisch" = she eats meat.
OK, you know how the verb ending in English changes for "he, she, it"?
- I eat
- you eat
- he, she, it eats
- we eat
- you eat
- they eat
So if you see the word "eats" in a sentence, you know it cannot be "I eats" or "they eats" - it has to be either "he eats" or "she eats" or "it eats".
German also changes the verb ending depending on the subject, only it has separate verb endings for just about all possibilities, not just one for "he, she, it" and one for everything else:
- ich esse
- du isst
- er, sie, es isst
- wir essen
- ihr esst
- sie, Sie essen
So if you see "sie essen", you know that it has to be "they eat", whereas if you see "sie isst", you know that it has to be "she eats" - because the verb ending wouldn't be right for the other person.
It's not a "variant" in the spelling that has been (more or less) standard for the last 20 years - just an old spelling. If you are learning German now, you should not use it - the two spellings are not interchangeable in the sense that you can choose whether to use "ß" or "ss" in a given word.
This is because, as usual, it's erratic in English and there's no distinct sound for either; we have an "i before e, except after c, or when sounded like a as in neighbor and weigh" mnemonic, but there are further exceptions, such as "foreign"..."feisty", "protein", "concierge" and words like "reignite" where they comprise parts of different syllables. A family member tells of people pronouncing the "Hei" in a very German name as if it was the English "hay" X)
How can i tell when duo isst means is eating and when it means eats
You usually can't -- only if there's a time indication such as "every day" or "right now" in the sentence that forces one of those aspects in the English translation.
So pick either translation, as both should be accepted in the absence of context.