[keiferski]

I would say it’s more that “they” is used for individuals when the subject is specified previously in the sentence or conversation. In your example sentence, “the stranger” clarifies this. If the sentence were simply “They bumped into me on the street.” it is unclear if the subject is singular or plural.

[signalsmith]

In my second example, I used "Julie" instead of "a stranger". The subject is specified in exactly the same way, but people might find "they" more surprising in that case.

Some people might even take it as a potential clue that Julie could be non-binary, because of how much we expect gender-matched pronouns at that point. (Not saying they should, just that they might.)

[keiferski]

Ah yes, my bad, you are correct. I meant to say that it's not simply that the distinction is between "named individual" and "stranger" but is more complex.

It seems like "they" is used 'correctly' for a singular subject when the subject has been previously referred to, but hasn't been given a proper name. But I'm sure a linguist has studied this in further detail.