Can people carry on a conversation with each side speaking a different form of Chinese, like in some movies?
People can carry on a conversation speaking whatever language they are comfortable with, if they can understand each other's language. This happens ALL the time in immigrant families all over the world. A typical situation is: Parents move from country A to country B, and are native speakers of A but have a good understanding of B. Their children, growing up in country B, acquire B with native fluency and understand A as their home language. In these families, parents and children carry on conversations in two different languages pretty much all the time. I don't see anything unrealistic about it.