Qui and que are both interrogative words. Interrogative words bear the indication of what kind of information you are looking for in the answer. For example, quand ("when") shows you are expecting information about time, où ("where") shows you are expecting information about place.
Qui is used to show you are expecting information about persons and que about things /ideas. Both, qui and que can be subject or object according to their function in the sentence.
Que vois-tu ?
The answer will be a thing/things.
Qui vois-tu ?
The answer will be a person/people. In both cases the interrogative pronoun is object to the verb.
In the following question :
Mais que sont ces cercles rouges sur le dos de Michael Phelps ?
que is the subject of sont and it represents things, namely ces cercles rouges (the red circles) visible on Michael Phelps's back, we want information on those marks, we can only use que here.
We could also say:
Mais qu'est-ce que sont ces cercles rouges sur le dos de Michael Phelps ?
In the sentence:
Qui sont ces gens assis sur le bord de la piscine ?
by using qui we indicate we are asking about the identity of the people.
If we said:
Que sont ces gens assis sur le bord de la piscine ?
que would indicate we want to know about the function of these people (ordinary spectators? journalists ? trainers ?...)