What are the possible values of $x$ for the following equation:
$$\frac{x - 1}{1 - x} = \frac1x$$
This equation is equivalent to $$x^2 - 1 = 0$$
which factors to $1, -1$.
However, is $1$ the correct answer to the original form of equation? Given that if one substitutes $1$ in the given form of equation, the LHS becomes $\frac{0}{0}$. In case, $1$ is actually the correct answer, please explain what is the catch here.
It is not equivalent to $x^2-1=0$. You can multiply both sides by $x(1-x)$ and get $x^2-1=0$, but that is valid only if the denominator $1-x$ is not $0$, and the denominator is $0$ when $x=1$, so you have to check separately whether $x=1$ is a solution to the original equation $\dfrac{x-1}{1-x}=\dfrac 1 x$. And it is not. So the original equation is actually equivalent to this: $$ x^2-1=0\text{ and } x\ne 1. $$