In Coleridge’s Christabel, the only person with insight into the character of Geraldine is Bracy the bard. Why is this significant? What does Sir Leoline think of Bracy’s vision-like story, and why?

In Part II of Christabel Bracy the bard makes his appearance. We first read of him saying that the sacristan should "let it knell," apparently supporting the continuation of Sir Leoline's law that a bell to remind us of the "world of death" should be rung often and slowly. By making Bracy a commentator on this tradition, Coleridge connects Bracy to the matter of the living world versus the world of death. 
Bracy is present later in Part II when Christabel and Geraldine emerge from Christabel's chamber after the bell wakes them. He is a witness as Sir Leoline listens to the description of what has allegedly befallen Geraldine in the woods. When Sir Leoline commands him to ride to Sir Roland with the message that Geraldine is safe and that Roland should come to fetch her, Bracy reveals that he would prefer to not embark on this particular day because of the portentous vision he had the night before.
As Bracy explains his dream of the struggling "dove" Christabel being strangled by a snake, it seems that the snake represents Geraldine. Bracy has vowed that he would spend this day in the forest attempting to flush out any unholiness with his saintly songs. If Bracy is a man who can chase away evil with his words and music, then it makes sense that he has had such a symbolic dream on the very same night that Christabel actually had been in the forest meeting the mysterious Geraldine. 
The significance of Bracy being the only one with insight into Geraldine's true nature is that, apart from expressing that he has some sort of holy power to drive away evil, he is the only person in the room who has not been physically touched by Geraldine. Christabel and Sir Leoline are both under Geraldine's power, having both embraced or been embraced by her. Christabel thus finds herself at first unable to speak against her, and Sir Leoline is filled with the urge to protect and avenge Geraldine.
Unfortunately for Christabel, Sir Leoline has succumbed to Geraldine's charms and has only been "half-listening" to Bracy while smiling at Geraldine. Thus he does not grasp the true meaning of Bracy's dream: that Christabel was the victim of the snake Geraldine. Instead Sir Leoline reacts to Bracy's story by telling Geraldine that he and her father will crush that pesky snake that has bothered her! Geraldine has so bewitched Sir Leoline that all he can do is gaze at her with his eyes "made up of wonder and love" instead of paying careful attention to the warning that Bracy's story should have been. This is exactly what Geraldine wanted, of course. Sir Leoline's declaration of protection and subsequent kiss on Geraldine's forehead set him all the farther from being able to recognize or believe Christabel's distress.
Bracy is the only character who has not been enchanted by Geraldine. At the end of Part II Sir Leoline is confused, embarrassed, and affronted that Christabel has begged him to send Geraldine away, so he sternly takes out his annoyance on Bracy. Sir Leoline abruptly reminds Bracy of his order to go find Lord Roland, and Bracy departs. Without Bracy there to speak against Geraldine, Christabel has no ally. Sir Leoline leads Geraldine forth from the room (though one might say that she is truly the puppeteer in that), having been compelled to banish righteousness and reject all warnings of the serpent who now dwells among them.