Why do highly fit, muscular people have bmis that insinuate they are overweight?

Muscle mass. The body mass index (bmi) is simply a calculation based on weight and height. It does not factor in body composition. Muscle is more dense and heavier than the same volume of fat. Therefore someone can have a higher muscle mass accounting for their weight giving her a higher bmi.
BMI. Bmi is calculated from body weight and height... So if you have an extraordinary muscle mass (body builder) you will appear as having a high bmi. In case of doubt, we do a body fat measurement.