Hmm I have never dreamed in third person. But I imagine it's like a game so if I understand it correctly you see yourself from a distance (where the camera is placed in games).

Reality checks are used to test if you are dreaming and if you do something impossible and have enough awareness you should become aware that it is a dream.

So what if you look straight down? Wouldn't you see the top of your head then? Because then you can use that as a reality check. If the third person view works the same way of course.