What exactly are you asking? If there is an alternate reality in this episode?
Some may say that in every moment and with every decision/action you do a alternate universe or several alternate realities are created (or branches out) where the opposite or a different action was taken.
Others will say that there is one reality, perhaps predefined.
Time loops are especially fun :) And I think this is what we have in this episode.
Here the future Picard is trapped in a time loop. What I think happened is the following: "Supposed" first time: The Vortex probed the ship, Troi said it wants only Picard, Picard eventually got into a shuttle and flew into the Vortex to save the ship only to be "thrown" back in time in the same reality.
This is how the events of the episode came to pass.
Picard realizes that if the shuttle flies in to the Vortex the loop will continue and kills his future self in order to break the loop. Changing the time line and causing the looping Picard to vanish - since he never really existed.
I think they retained memory of him only because of some side-effect of the Vortex.
I hope that answers your question :)