This is the best question I've seen from you. The answer seems to be that we really don't know for sure. It's one of the mysteries of science that keep things fun. There are possible explanations, but we have yet to nail that one down -
https://en.wikipedia.org/wiki/Moon_illusion
Possible explanations
The size of a viewed object can be measured objectively either as an
angular size (the visual angle that it subtends at the eye, corresponding to the proportion of the
visual field that it occupies), or as
physical size (its real size measured in, say, meters). Perceived size is only loosely related to these concepts, however. For example, if two identical, familiar objects are placed at distances of five and ten meters, respectively, then the more distant object subtends approximately half the visual angle of the nearer object, but we normally perceive that as the same size (a phenomenon referred to as
size constancy), not as half the size. Conversely, if the more distant object did subtend the same angle as the nearer object then we would normally perceive it to be twice as big.
A central question pertaining to the Moon illusion, therefore, is whether the horizon moon appears larger because its perceived angular size seems greater, or because its perceived physical size seems greater, or some combination of both. There is currently no firm consensus on this point. Most recent research on the Moon illusion has been conducted by psychologists specializing in human perception. After reviewing the many different explanations in their 2002 book
The Mystery of the Moon Illusion, Ross and Plug conclude "No single theory has emerged victorious".
[8] The same conclusion is reached in the 1989 book,
The Moon Illusion edited by Hershenson, which offers about 24 chapters written by different illusion researchers.