Because muscle and bone are denser than fat, and exist in higher proportion in fitter people, two people could easily have identical BMIs even though one is a powerlifter with 5% body fat and the other is mostly made of Cheetos.
Yes, but powerlifters with 5% body fat are far more rarer than Cheetos-munging fat people.
So the possibility of such false positives is not that high, making still a good heuristic. Not to mention: if one is a thin, mostly-muscle powerlifter type, they already know they are not obese...