I believe this is because they think about *everything* on an individual level. They don't really understand (or just have no experience with, or no framing for) talking about a system or combinations of people and 2nd and 3rd order effects.
Their whole world is about individuals and thinking about individuals they meet and thinking about themself as an individual and their family as individuals. They do not have a language for "systems" and therefore do not see them.
So when other people talk about systems, they genuinely think they are talking about the individual people. They have no way of knowing or seeing otherwise. They have no word for it in their personal vocabulary of experience.
And most people think this way, I think. Probably 70-80%, just going about their day thinking about themselves and their immediate contacts.