Sometimes you need to identify a spell, especially if its effects aren’t obvious right away. If you notice a spell being cast, and you have that spell in your repertoire or prepared it that day (even if you already cast it), you automatically know what the spell is, including the rank to which it is heightened.
If you want to identify a spell but don’t have it prepared or in your repertoire, you must spend an action on your turn attempting to identify it using Recall Knowledge. You typically notice a spell being cast due to its sensory spell manifestations. Identifying long-lasting spells that are already in place requires using Identify Magic instead of Recall Knowledge because you don’t have the advantage of watching the spell being cast.
You don’t accept the fact that once spells are prepared, they can’t be changed until your next daily preparations, and you have uncovered a shortcut allowing you to substitute new spells for those you originally prepared.
You can spend 10 minutes to empty one of your prepared spell slots and prepare a different spell from your spellbook in its place. If you are interrupted during such a swap, the original spell remains prepared and can still be cast. You can try again to swap out the spell later, but you must start the process over again.
I am a wizard with the Spell Substitution Thesis. I prepared Dizzying Colors and Fear during my daily preparations. Later that day, I swapped out Fear and prepared Force Barrage in its place. At the day's conclusion, my fellow PCs and I fight a boss who casts all three of these spells. Do I automatically identify:
A. Dizzying Colors, Fear, and Force Barrage because I prepared all three that day?B. only Dizzying Colors and Fear, because I didn't prepare Force Barrage in my daily preparations?
C. only Dizzying Colors and Force Barrage, because I don't have Fear prepared at the time I witnessed it and I didn't already cast it that day?
I'm leaning in favor of C. A would allow me to spend an hour temporarily preparing every spell in my spellbook to recognize all of them on sight, which sounds too good to be true. B would cause problems for Counterspell (an already situational feat), and the thought of being able to cast a spell but not recognize its manifestations on sight is just ridiculous.
And no, the rule cited below has no bearing on this, as it is exclusively for the purpose of handling durations.
You might gain an ability that allows you to swap prepared spells or perform other aspects of preparing spells at different times throughout the day, but only your daily preparation counts for the purpose of effects that last until the next time you prepare spells.
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I would also go with C). You recognize the spells that you currently have in your prepared spell slots*. When you swap out spells due to spell substitution then it should behave as though the new spell was the one prepared to begin with.
I agree with your assessments of options A) and B) .
* whether the spell has been cast or not - that part was clarified in Player Core.