En entity might be an entity because of some traumatic incident. That Grandpa died before little Priscilla managed to live up to his expectations might be enough to put an entity named "Grandpa" in her space who will continuously remind her about what she should be doing. Re-experiencing some of the incidents that are involved would be likely to resolve that. If we complete the incidents, bring in more resources and so forth, then probably Grandpa will get his mission completed, and he will no longer need to hang around as an entity.
Conversely we can also address any character in an incident and talk with them as necessary. If the incident doesn't resolve just by experiencing it from different viewpoints, then we can address the main players in it and process them. We can help them to realize their own basic purposes, and have more choices in how to carry them out. We can ask them for information, or anything else we might care to talk about.
In incident processing the focus is on experiencing what is happening. You do that associated into some of the viewpoints that are present, you experience it as they would.
In entity processing you deal with the viewpoints from the outside. You talk with them, ask them processing questions, get information from them and so forth. You are dissociated from the active players in the scenario.
Both are perfectly valid and can be done interchangeably. The incident view is more at cause, whereas the entity view pretends that it is someone else. However, it has the advantage that one can see the phenomenon more from the outside and often be more effective in doing what is necessary. There is less resistance to changing something that you pretend not to be.