But what if the encounter table is for PCs only? Like heroes in adventure fiction, they lead coincidence strewn lives quite different from those of ordinary people.
PCs go in a tavern and it's a front for the Thieves' Guild. PC gets a girlfriend and she turns out to be a succubus. They travel by boat and it's attacked by pirates. They step outside the front door and get eaten by an ankheg. Normal people don't experience any of that, they go in a tavern and have a quiet drink.
The encounter tables may not be simulationist.
Actually, I'm sure "normal people" do experience that kind of thing, though not every day. That tavern you mention that acts as a front for the Thieves' Guild? That would likely be classified as a "Prime Inhabited Area", which is considered a special case within the 1e DMG. You wouldn't necessarily use the matrix for that.
I treat those encounter tables as simulationist, in that the City/Town Encounters Matrix acts as an example of what to expect in most towns and cities that aren't Prime Inhabited Areas. Most of the NPCs don't start attacking you without provocation, because they have their own business to attend to, though it is more dangerous to travel the towns and cities at night.....