I think PD only refers to the requirement for a set back from the eaves of 200mm. So you can build up to the centre line of party wall. Ironically you can't typically get planning permission for this kind of 'full width' dormer - because it looks shit and is much better architecturally to be set in from either side a decent amount. But PD is PD.
If your neighbour's have built up to centre line or close to it they have forced your hand to either - connect your dormer (with adequate waterproofing detail + fire resistance for the new 'party wall' - could be brick but not necessarily) or. set your dormer cheek in far enough for it to be constructed properly and maintained. - so at least 50cm between the tiled dormer cheeks - or thereabouts. This one obviously seriously limits your internal space.
You do see dormers built right up to each other but the construction, waterproofing and maintenance issues are best avoided.
On the other party wall where there is no neighbour's dormer you need to consider if you will a. raise a party wall in brick - allowing them to build a dormer up to it in future, or b. have the cheek finish on the centre line, which will lead to the same negotiation later when someone wants to do a dormer that side.