Here is the first figure from one of the original Bullet Cluster dark matter papers, Markevitch et al 2003.
The contours are the same in both panels and show the mass density of dark matter obtained from gravitational lensing. Notice how they form a continuous distribution of mass spanning mega-parsecs (Mpc). 1 parsec is about 3 light years, so the dark matter is spread out over millions of light years in size. For comparison, the radius of a 1 million solar mass black hole is about $10^9$ meters. That's $10^{-7}$ light years.
Panel (b) compares the dark matter distribution to the x-ray image. Regular matter, like gas, interacts with other regular matter causing it to lose energy. This is basically like friction or fluid viscosity. The interactions cause the gas to heat up to very high temperatures (converting mechanical kinetic energy to thermal energy) and emit x-rays (converting thermal energy to photons). The dark matter doesn't interact and doesn't lose energy this way. The dark matter halos pass through each other, with the regular matter lagging behind.
Everything still experiences gravity. To say the dark matter is non-interacting is to say that it doesn't experience electromagnetic or nuclear forces (or it only experiences them at a much, much weaker level than regular matter).
The Bullet Cluster in and of itself doesn't rule out dark baryonic matter or black holes. It is seen as a refutation of modified Newtonian dynamics (MOND). MOND explains galaxy rotation curves by modifying gravity. The dark matter hypothesis says there is extra mass in galaxies that does not emit any detectable electromagnetic radiation causing the observed rotation curves.
Only ~$10\%$ of the luminous matter in a galaxy cluster is observable in the optical with the remaining luminous mass observed in X-rays. If there were no actual dark matter and MOND were right, we would expect the microlensing region to align more with the X-ray emission since that's where most of the mass is (in this case the microlensing mass determination based on GR would be wrong).
If dark matter is real, then it is possible for the microlensing region to decouple from the X-ray emission under the right circumstances. The Bullet Cluster provides exactly the kind of situation where the microlensing mass is observed to move independently of the X-ray mass. This shows the microlensing is not just the result of the X-ray mass's (modified) gravity, but is real mass in the cluster.
Clowe et al (2003) is the original Bullet Cluster dark matter v. MOND paper. Notably they don't claim to fully refute MOND. They say that even if you assume MOND is correct, there still needs to be dark matter to explain the Bullet Cluster observations.
If we actually want to figure out what the dark microlensing mass is, we need to turn to other observations. @ProfRob discusses this in another answer.