He no longer projects onto the coat his desire for posession and the thought that it belongs to him. In yoga, it is called ahamkara, or ego. In yoga, ego is the part of consciousness which desires to identify itself as a distinct personality. It is the part of us that seeks to be different, to be special, to be better than others. This seeking creates a feeling of separation and the ego experiences itself as apart, as oppossed to apart, of life and of God.
People then appear as ugly, violent, cruel, and threatening.
Projection, however, is a total process, and the ego's baby ends up getting thrown out with its bath water. Different people then appear as beautiful, wise, powerful, spiritually advanced, etc. Projection inevitably results in conflict, for every ego is convinced that its projected values are right and proper. And it is the nature of the ego that it has little reluctance to attack, or even kill, when it feels justified. Thus we can understand the remarkable phenomenon in war that all parties are confident God is on their side.