Distinguishes, makes out (8)
I believe the answer is:
discerns
I believe this is a double definition.
'distinguishes' is the first definition.
('discern' can be a synonym of 'distinguish')
'makes out' is the second definition.
('discern' can be a synonym of 'make out')
(Other definitions for discerns that I've seen before include "Distinguishes, makes out" , "Detects, makes out" .)