(ב) כִּי יָקוּם בְּקִרְבְּךָ נָבִיא אוֹ חֹלֵם חֲלוֹם וְנָתַן אֵלֶיךָ אוֹת אוֹ מוֹפֵת. (ג) וּבָא הָאוֹת וְהַמּוֹפֵת אֲשֶׁר דִּבֶּר אֵלֶיךָ לֵאמֹר נֵלְכָה אַחֲרֵי אֱלֹהִים אֲחֵרִים אֲשֶׁר לֹא יְדַעְתָּם וְנָעָבְדֵם. (ד) לֹא תִשְׁמַע אֶל דִּבְרֵי הַנָּבִיא הַהוּא אוֹ אֶל חוֹלֵם הַחֲלוֹם הַהוּא כִּי מְנַסֶּה יְהוָה אֱלֹהֵיכֶם אֶתְכֶם לָדַעַת הֲיִשְׁכֶם אֹהֲבִים אֶת יְהוָה אֱלֹהֵיכֶם בְּכָל לְבַבְכֶם וּבְכָל נַפְשְׁכֶם.
It seems pretty simple. Sometimes, Hashem will test us by sending false prophets who seem to have supernatural power. Even so, if they say that we should worship idols, then they are liars and Hashem is merely testing us.
It may seem straightforward, but this law has applications that you wouldn't normally think of. For example: Joseph and his brothers.
(יט) וַיֹּאמְר֖וּ אִ֣ישׁ אֶל־אָחִ֑יו הִנֵּ֗ה בַּ֛עַל הַחֲלֹמ֥וֹת הַלָּזֶ֖ה בָּֽא׃
Yellow underlining just to point out that both Yosef and a Navi Sheker are defined by their aspect of having dreams. Although no one thinks of this as prophecy, it is a foretelling of the future. The brothers have reason to suspect that Yosef isn't acting completely legally.
רמב"ם הלכות עבודה זרה 9:4
כנענים עובדי כו"ם הם ויום ראשון הוא יום אידם לפיכך אסור לתת ולשאת עמהם בארץ ישראל יום חמישי ויום ששי שבכל שבת ושבת ואין צריך לומר יום ראשון עצמו שהוא אסור בכ"מ וכן נוהגין עמהם בכל אידיהם:
Maimonides, Laws of Idol Worship 9:4
The Christians are idol worshipers and Sunday is their religious holiday, therefore in Eretz Israel we may not trade with them on Thursday and Friday of every week, and needless to say on Sunday, which is forbidden [for trade with Christians] everywhere.”
The RaMBaM believed that christians were idol worshippers in his days because along with G-d, they worshipped a person (now, though, cristianity has changed significantly). Could Josef's brothers have thought of him as inciting idolatry by making them worship him?
When reading about Yaakov's sons, you must wonder why the brothers wanted to kill Yosef. After all, he's their own flesh and blood! As much as my siblings annoy me sometimes (shoutout to Shlomi Helfgot), we can gest past our little spats. So maybe the only way to explain their harsh action is that they believed Yosef was a Navi Sheker.
(ו) וְהַנָּבִיא הַהוּא אוֹ חֹלֵם הַחֲלוֹם הַהוּא יוּמָת כִּי דִבֶּר סָרָה עַל יְהוָה אֱלֹהֵיכֶם הַמּוֹצִיא אֶתְכֶם מֵאֶרֶץ מִצְרַיִם וְהַפֹּדְךָ מִבֵּית עֲבָדִים לְהַדִּיחֲךָ מִן הַדֶּרֶךְ אֲשֶׁר צִוְּךָ יְהוָה אֱלֹהֶיךָ לָלֶכֶת בָּהּ וּבִעַרְתָּ הָרָע מִקִּרְבֶּךָ.
(כא) וַיִּשְׁמַ֣ע רְאוּבֵ֔ן וַיַּצִּלֵ֖הוּ מִיָּדָ֑ם וַיֹּ֕אמֶר לֹ֥א נַכֶּ֖נּוּ נָֽפֶשׁ׃ (כב) וַיֹּ֨אמֶר אֲלֵהֶ֣ם׀ רְאוּבֵן֮ אַל־תִּשְׁפְּכוּ־דָם֒ הַשְׁלִ֣יכוּ אֹת֗וֹ אֶל־הַבּ֤וֹר הַזֶּה֙ אֲשֶׁ֣ר בַּמִּדְבָּ֔ר וְיָ֖ד אַל־תִּשְׁלְחוּ־ב֑וֹ לְמַ֗עַן הַצִּ֤יל אֹתוֹ֙ מִיָּדָ֔ם לַהֲשִׁיב֖וֹ אֶל־אָבִֽיו׃ (כט) וַיָּ֤שָׁב רְאוּבֵן֙ אֶל־הַבּ֔וֹר וְהִנֵּ֥ה אֵין־יוֹסֵ֖ף בַּבּ֑וֹר וַיִּקְרַ֖ע אֶת־בְּגָדָֽיו׃
(21) And Reuben heard it, and delivered him out of their hand; and said: ‘Let us not take his life.’ (22) And Reuben said unto them: ‘Shed no blood; cast him into this pit that is in the wilderness, but lay no hand upon him’—that he might deliver him out of their hand, to restore him to his father. (29) And Reuben returned unto the pit; and, behold, Joseph was not in the pit; and he rent his clothes.
Reuven, however, acts against his brothers and tries to save Yosef's life. Although he manages to keep his younger brother alive, Yosef is cast out from the family for 22 years.
I would like to propose that since Yosef did this false dreaming scene without intention of avodah zarah, the punishment was administered halfway: חֹלֵם הַחֲלוֹם הַהוּא יוּמָת ,that he should die, was left unfulfilled; however, וּבִעַרְתָּ הָרָע מִקִּרְבֶּךָ ,that he should be removed from Bnai Yisrael, was administered.
(כו) וַיֹּ֥אמֶר יְהוּדָ֖ה אֶל־אֶחָ֑יו מַה־בֶּ֗צַע כִּ֤י נַהֲרֹג֙ אֶת־אָחִ֔ינוּ וְכִסִּ֖ינוּ אֶת־דָּמֽוֹ׃ (כז) לְכ֞וּ וְנִמְכְּרֶ֣נּוּ לַיִּשְׁמְעֵאלִ֗ים וְיָדֵ֙נוּ֙ אַל־תְּהִי־ב֔וֹ כִּֽי־אָחִ֥ינוּ בְשָׂרֵ֖נוּ ה֑וּא וַֽיִּשְׁמְע֖וּ אֶחָֽיו׃
(26) And Judah said unto his brethren: ‘What profit is it if we slay our brother and conceal his blood? (27) Come, and let us sell him to the Ishmaelites, and let not our hand be upon him; for he is our brother, our flesh.’ And his brethren hearkened unto him.
לפי שרדף אליפז בן עשו במצות אביו אחריו להורגו והשיגו ולפי שגדל אליפז בחיקו של יצחק משך ידו א"ל מה אעשה לציווי של אבא אמר לו יעקב טול מה שבידי והעני חשוב כמת
...Because Elifaz the son of Esav chased him on his father's command to kill him, but because they both grew up in Yitzchak's bosom, he pulled back his hand and said, "What should I do about the command of my father?" Yaakov said to him, "Take what is in my hand, since the poor person is thought of as dead."
Another approach is that the brothers "killed" him by making him into a penniless slave, fulfilling the letter of the law while allowing for compassion. Interestingly, the Hebrew word for blood and the word for money are the same; the brothers chose to spill Yosef's money instead of his blood.
In conclusion: The laws of Navi Sheker are more applicable than it would seem. Yosef fulfilled the qualifications, but since he didn't purposely try to sin, he was punished partially, though in a way that still obeyed the law.