There are two interpretations that compete here:
(1) That
not believing in the existence of the true Prophet means
just not believing in the general idea of there being one, some day.
In this vein, Samaritans for example
believe in the true Prophet and also (in the text) believe in Jesus, but they don't make the identity between the two.
Book I, Chapter 54
"Another schism is that of the Samaritans; for they deny the resurrection of the dead, and assert that God is not to be worshipped in Jerusalem, but on Mount Gerizim. They indeed rightly, from the predictions of Moses, expect the one true Prophet; but by the wickedness of Dositheus they were hindered from believing that Jesus is He whom they were expecting."
The Samaritans are singled out, among all the sects, for expecting "the one true Prophet." This does seem significant. When speaking of the Jews in general, the term switches to "Christ" or at best "the one prophesied by Moses," which seems to be a step down from the shared understanding regarding "the one true Prophet" claimed to have been achieved by the Samaritans. The Samaritans have presumably also read some of the "angel of the Lord" passages similarly (according to what I've read anyway [?]). So they may go one step beyond simple expectation, into having an idea that the true Prophet has been waiting in the wings somewhere and has interacted with Abraham and Moses. Dositheus and Simon, in succession, deceive those among the Samaritans regarding the Prophet. Simon, by simply claiming to be him.
Book VII, Chapter 33
"But we adhered, for friendship’s sake and boyish companionship, to one Simon, a magician, who was educated along with us, so that we were almost deceived by him. For there is mention made in our religion of a certain Prophet, whose coming was hoped for by all who observe that religion, through whom immortal and happy life is promised to be given to those who believe in Him. Now we thought that this Simon was he."
Apparently if there is any group that actually believes in the true Prophet, outside of the circle of the believers led by James and Peter, it would be the Samaritans. Everyone else (non-Samaritan, non-Simonian, non-Christian) would not be those who believed in the true Prophet, although they may be expectant regarding a "Christ" figure (which seems more of a least common denominator reference to messianic expectation).
(2) That
not believing in the existence of the true Prophet means
also not believing in Jesus.
The question isn't so much whether those who don't believe in the existence of the true Prophet don't believe in the existence of the true Prophet generally (I would guess that they don't). The question is more about
why they don't believe in the existence of the true Prophet. Is it because they don't believe that the scriptures are interpreted correctly (or they don't believe in scripture)? Is it because they don't believe it applies to Jesus (or they don't believe in Jesus)?
They may not believe in scripture. From the context, with the refutation of the "philosophers" (the "Greeks") and their vain speculation, the Gentiles seem to be the main target. So perhaps they aren't presumed to have any real motivation to go to (Jewish) scripture to find the existence of the true Prophet foretold there. That's distinctly not the Gentile path to belief, since they didn't have the scripture. They started from something more distinctly Christian, the preaching about Jesus. We may thus, likewise, discard the idea that they believe the scripture didn't apply to Jesus, as that's not the main concern of the Gentiles and the philosophers.
This leaves the most likely option, with reference to disbelievers such as the contemporary philosophers, that
they did not believe in the existence of the true Prophet because
they did not believe in Jesus. And at this point, we can attempt to split hairs further. Does not believing in Jesus mean:
(2)(a) Not believing that Jesus was all he was cracked up to be (perhaps just another "magician").
or
(2)(b) Not believing that Jesus existed / appeared.
This is a much harder question to resolve definitively, but it's a little amazing that we're even able to consider it (given the history of this kind of thing -- this has been the rallying cry for a long time - "nobody in antiquity disbelieved in Jesus' appearance on earth" - well, it's hard to prove that).
However, I'm struck again by some of the particular wording of this text, which might mean that there truly were people who did not believe in the existence of "the true Prophet" (i.e. Jesus). Indeed, if the group who produced this text presented Jesus as "the true Prophet," this is quite what you'd expect a denial of the claim of his existence to look like: a denial of the existence of the true Prophet (much the same way saying that Christ didn't exist, e.g. in Arthur Drews' formulation, "The Christ Myth," is also meant to implicate Jesus).
There are three portions of the text that also make me wonder, in this regard.
Book I, chapter 6.
"Not to make a long story of it, whilst I was tossed upon these billows of my thought, a certain report, which took its rise in the regions of the East in the reign of Tiberius Cæsar, gradually reached us; and gaining strength as it passed through every place, like some good message sent from God, it was filling the whole world, and suffered not the divine will to be concealed in silence. For it was spread over all places, announcing that there was a certain person in Judæa, who, beginning in the springtime, was preaching the kingdom of God to the Jews ... These and such like things were confirmed in process of time, not now by frequent rumours, but by the plain statements of persons coming from those quarters; and day by day the truth of the matter was further disclosed."
Book I, chapter 11.
“Only expound to me the doctrine of that man who you say has appeared, and I will arrange your sayings in my language, and will preach the kingdom and righteousness of Almighty God; and after that, if you wish it, I shall even sail along with you, for I am extremely desirous to see Judæa, and perhaps I shall remain with you always.”
Book V, Chapter 10
"He therefore is the true Prophet, who appeared to us, as you have heard, in Judæa, who, standing in public places, by a simple command made the blind see, the deaf hear, cast out demons, restored health to the sick, and life to the dead; and since nothing was impossible to Him, He even perceived the thoughts of men, which is possible for none but God only. ..."
The objective distance created by these statements are all the more interesting as they are coming from a believing writer.
Combined with the reference to those who don't believe in the existence of the true Prophet, they create a definite impression that some did doubt.
I can find no way to refute this suspicion; thus, while it may not be proven in all details, it certainly seems to be a legitimate reading.
"... almost every critical biblical position was earlier advanced by skeptics." - Raymond Brown