True, sometimes...actually the 10th century might even be a bit early. Much more can be said about this very large topic, but here are some older answers about what Christians thought at the time:
When did the Byzantines stop thinking of Islam as a heresy, and start thinking of it as a religion? by /u/shlin28
I'm a Crusader heading towards the Holy Land in 1096. How much do I understand about Islam? by me
I'm loath to make a continent-wide valuation judgment on whether "Christians" as a whole understood Islam as a heresy rather than a distinct religion, but we do have some evidence it might have been popularly understood as such, or at least originating from a heresy, maybe as late as the 14th century, at least in Dante.
In Inferno, Dante places Saladin, Avicenna, etc alongside other "virtuous pagans" in Limbo, which would seem to indicate that he was aware Muslims were not part of Christendom and were members of a distinct faith:
From Inferno Canto IV:
And the good Brutus who overthrew the Tarquin:
Lucrezia, Julia, Marcia, and Cornelia;
And, by himself apart, the Saladin.
And raising my eyes a little I saw on high
Aristotle, the master of those who know,
Ringed by the great souls of philosophy.
All wait upon him for their honour and his.
I saw Socrates and Plato at his side
Before all others here. Democritus
Who ascribes the world to chance, Diogenes,
And with him there Thales, Anaxagoras,
Zeno, Heraclitus, Empedocles.
And I saw the wise collector and analyst –
Dioscorides I mean. I saw Orpheus there,
Tully, Linus, Seneca the moralist,
Euclid, the geometer, and Ptolemy,
Hippocrates, Galen, Avicenna,
And Averrhoës of the Great Commentary.
But later, in the Eighth Circle, Dante puts Muhammad and Ali alongside other heretics, schismatics, and "sowers of discord," which may (and I stress contingency here, as not all Dante scholars agree as far as I know) suggest he at least believed that Islam had been born of Christian heresy, even if it was not considered as such by the 14th century. It's worth noting that Dante seems to draw on other medieval popular fictions, such as the emperor Trajan being secretly converted to Christianity, hence his inclusion in Paradise, but I digress.
From Canto XXVIII:
Even a cask with bottom or sides knocked out
Never cracked so wide as one soul I saw [Muhammad]
Burst open from the chin to where one farts.
His guts were hanging out between his legs;
His pluck gaped forth and that disgusting sack
Which turns to shit what throats have gobbled down.
While I was all agog with gazing at him,
He stared at me and, as his two hands pulled
His chest apart, cried, “Look how I rip myself!
“Look at how mangled is Mohammed here!
In front of me, Ali treks onward, weeping,
His face cleft from his chin to his forelock.
“And all the others whom you see down here
Were sowers of scandal and schism while
They lived, and for this they are rent in two.”
Clearly Dante had a much lower opinion of Islam's founding figures than he did of Old Testament patriarchs or a few later medieval Muslims. There is some controversy around the inclusion of Ali here, as it's unclear whether his sin is participating in a schism from Christianity, or merely creating a schism within Islam (as this would still be seen as sinful even outside of Christendom)--two pagans (Brutus and Cassius) suffer the worst possible punishment for their betrayal of another pagan (Caesar), so the hierarchy of sin still seems to apply outside of Christianity.
I am an early modernist rather than medievalist but have written extensively on European perceptions of Islam so I can give some background. The short answer is yes this is true; indeed I would be surprised if many 10th century European christian's viewed Islam as a 'separate religion' (as this would accept that it was valid in its own terms).
The earliest extant Christian accounts of Islam are not European, e.g. the Fountain of Knowledge by John of Damascus (c.745). This text presents the 'heresy of the Ishmaelites' as a diabolically inspired perversion of 'true religion' (i.e. Christianity) linking its character to the supposed moral failings of its prophet. For example, the prophet is presented as lustful and this is offered as an explanation of the practice of polygamy. This kind of logic is central to the medieval christian polemical tradition towards Islam which often presents the prophet as a kind of trickster who inverts Christianity, i.e. tricks instead of miracles (e.g. teaching a pigeon to come to his ear and pretending it is the holy ghost), expansion by conquest rather than peaceful conversion, a religion of lust instead of chastity, a heaven that offers sensual riches instead of spirituality, and other such misrepresentations.
The earliest Christian accounts of Islam are as you would expect not European (given the area of the modern middle east was largely christian at the time of the Islam conquests). However, this tradition influences later European writing. For example the 12th century latin Cluniac works included not only a translation of the Quran by Robert of Ketton, but also Peter of toledo's translation of the earlier arabic christian apologetic work Risalat al-Kindi, alongside a couple of polemical anti-islamic works by Peter of Cluny.
Even more ambivalent depictions of Islam in the medieval period don't generally portray it as a valid religion in its own right. For example in the 11 century Song of Roland the Muslim character Baligant might be seen as a somewhat sympathetic antagonist. However, Islam itself is presented as idol worshiping paganism (an odd idea that also appears in some early English mummers plays) - and in general Islam and its armies are simply an evil foil to the heroic christian forces.
The Cluniac (i.e. commissioned by peter of Cluny) texts mentioned above are partly significant because they are reworked in the sixteenth century as part of a Protestant response to Islam in the context of the Ottoman advance into Europe. Notably Theodore Bibliander published a Latin translation of the Quran in 1543 which drew on these medieval Cluniac sources (and was heavily polemical). These protestant works - including Luther's Vom Kreige wider die Turken, 1529 - presented Islam as not only a heresy but as the scourge of god, sent to punish errant Christians and call them to reform.
The idea that Islam is a heresy and therefor a parody or inversion of Islam had a great deal of staying power for more than a thousand years. It was still basis of the standard educated Europeans ideas about Islam in the sixteenth and seventeenth centuries, and I have even seen it appear in nineteenth century sources.
It is hard to say whether these theological and scholarly ideas defined what the 'average' European thought about Islam in the early medieval period but we can say that these ideas were widespread among educated Europeans in later periods. For example the 17th century traveler William Lithgow claim that the reasons that Mosques take the form of domes instead of having steeples like churches is that Muslims contradict all the forms of Christianity.
For further reading see for example:
M. Frasseto and D. Blanks, eds. Western Views of Islam in medieval and early modern Europe (1999)
M. Dimmock, Mythologies of the Prophet Muhammad in Early Modern English Culture (2013)
N. Daniel, Islam and the West: the making of an image (1960).