Usage of participle and contemporary actions

Question

In this sentence: "Женщина, читающая книгу, жила в Москве", could you please tell me which is the correct interpretation?

• "the woman, that is now reading a book (I see her right now doing it), used to live in Moscow (some time ago)." The two actions are on two different time levels

or

• "The woman that was reading a book (also) lived in Moscow." It's like both actions happen at the same moment and both happen in the past. It's like I'm telling a friend about an encounter I had with this woman, who, at the moment I met her, was reading a book and was also living in Moscow.

Answer 1

The first one is the correct interpretation. To express the second one you would say "Женщина, читавшая книгу, жила в Москве".

Answer 2

While generally the first interpretation is the correct one, it has to be remembered that there is such thing as 'historical present', when a narrator uses present when telling about past events. Though I may be mistaken, it seems to me that this rhetorical device tends to be used oftener in Russian than in English.

If this is the case, the sentence means, 'the woman who was reading the book had lived in Moscow' (the past tense is used for what happened before the time of narration). In my opinion, it would have its meaning clearer with 'прежде', 'раньше' or 'до того'.

For another thing, participles are not so extensively used in basic communications. Someone may feel confused by tenses and use them incorrectly or inconsistently. The sentence might be supposed to mean 'the woman who was reading the book was living in Moscow'; that's ungrammatical, of course, but not so severe an error.