Hi,
You're right: A/C dryes the air by condensating it in the evaporator and draining it to the outside of the car.
However it will only happen if it is turned on.
As soon as you turn it off the water still in the evaporator fins and in the condensate tray will evaporate to the interior of the car creating fog if the cold surfaces inside are cold enough (and windshield glass usually is).
The general reason to have foggy conditions has to do with the presence of water inside the car, either through A/C condensates, an infiltration of rain water or even simply by putting inside the car a wet umbrella or raincoat.
All these situations will create fog inside the car if temperature of mainly metal and glass surfaces are colder than surrounding air.
That's why, when you have bright sun after rain conditions, there's a tendency to have fog inside the car.
Tone