I'm sure that modern humans had an understanding that non modern humans were different than other primates, but I think it's hard to wrap our heads around how fundamentally different the thought process of humans was 100,000 years ago. Our tech level was actually still quite low, it's unclear how complex our language was, and it's also unclear if human brains were as developed in complexity and capacity (though it's clear that they were essentially equal in size). 

I'm not sure that they would have seen Neanderthals as fundamentally different from another group of modern humans that had a very different visual manifestation (not just in terms of morphology, but in dress and decoration and manner of acting/talking.

We have a very scientific reference point, but back then, there would have been no sense of empirical or concrete facts. What is spritual, what is cultural, what is subjective would have all blended together. People only new a handful of other individuals, so when someone looks weird it's not 1 Neanderthal vs millions of humans, it's just "that dude fugly, and his spear is different,"