They will not see your balance, because the full 256-bits do not match, if I understand. The only issue is that if two accounts share the same first 20 digits, then at that point, if NXT is sent to that address, which account will it go to? Other than the possibility of transactions that are sent to you being "intercepted" by the other address sharing the 20 digits, your balance can't be spent.
Right, so they won't see my balance.
So tell me, or CfB, you tell me, I send my 1000 NXT to an address say 11111111111111111111.
How does the 'system' know that really I mean to send it to the address with the full key 11111111111111111111999999999999999999999 or the address with the full key 1111111111111111111155555555555555555
Let's say it doesn't and two of us (or more) can log into our own wallets. I have the one ending with the 9s and you have the one ending in the 5s.
How does it know that the coins are mine and not yours? How does it stop you spending those coins?
The system doesn't know that. But other user won't give u 11111111111111111111 as his account id.