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One of the greatest ambiguities of Gatsby's character in chapter 3 has to do with who people think he is and how Nick comes to feel about him
People talk about the fact that he killed a man (twice), and that he was a German spy during the war. These instances build people's suspicion about who he really is, but Nick said that men like him
didn't drift coolly out of nowhere and buy a palace on Long Island.
This proves to us he didn't quite believe Gatsby the bad guy every one else gossiped about and used for their party central.
Nick also noted that Gatsby had
one of those rare smiles with a quality of eternal reassurance in it, that you may come across four or five times in your life. It faced... and then concentrated on you with irresistible presence in your favor. It understood you as far as you wanted to be understood, believed in you as you would like to believe in yourself, and assured you that it had precisely the impression of you... that you had hoped to convey.
What registers as strange here is that of all people in this novel, the one searching for acceptance and confidence is indeed Gatsby, but he is giving with just a smile, all that confidence to Nick.
I think that the major ambiguity that Nick sees in Gatsby is that Gatsby acts very confident but really is not. He alludes to this when he first realizes who Gatsby is. There, he says that Gatsby seems to be really understanding and reassuring (which takes confidence in yourself). But at the same time, Gatsby is being very careful and overly formal in his speech.
Earlier in the chapter, you can see this same tension revealed in the way Gatsby's parties go and in some of the things in his house. I think this tension is revealed, for instance, by the way he bought the dress for that woman who tore hers. He buys an expensive dress (very confident and generous act) but left the tag on (not so confident -- seems to imply he will think she won't believe it's real or something.)
I think we see the same thing in how much Gatsby tends to throw parties while yet staying aloof from the people who attend.
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