People at an event involving umbrellas embrace one another.
The people at the event are embracing each other
Only one group of people and one event are mentioned, so 'the' is appropriate in both cases; since they embrace, they are embracing; 'each other' is synonymous with 'one another'.
exists e1 e2 s1 x1 x2 x3 x4 x5.(Theme(e2,x5) & Actor(e2,x1) & v_embrace(e2) & n_thing(x5) & card_eq_1(x5) & a_another(s1) & Theme(s1,x5) & Theme(e1,x4) & Actor(e1,x3) & v_involve(e1) & n_umbrella(x4) & (x1 = x3) & at(x1,x2) & n_event(x2) & n_people(x1))
exists x1 x2.(n_event(x2) & n_people(x1) & all x3.(n_other(x3) -> exists e1.(Theme(e1,x3) & Actor(e1,x1) & v_embrace(e1))) & at(x1,x2))