Our eyes are not just simple cameras, we also have to learn to see and learn how to interpret. Our eyes have to use distance and shape cues from memory to help make sense of what we see. We can watch TV, off angle from the orthogonal to the screen, so that the aspect ratio of the screen has to be "corrected', flattened out, by the brain, essentially doing a perspective transformation on the image so we can recognize the familiar shapes of objects being displayed.

This is how UFO sightings become so distorted, untrained observers become visually disoriented and cannot process the subconscious cues that allow them to judge shape, size, brightness, distance, speed and so on. Imagine yourself strapped in the cockpit of a jet fighter in a dogfight. All you see is a blaze of shapes and color, the pilot is trained to sort it all out into a three dimensional dynamical model of the action.

Your confused forest dwellers are perceiving just like we would if we were suddenly transported into their environment: disoriented and confused. They're just not used to long distances and the processing that has to be done to correct and interpret what they see. We, in turn, see just a mass of green and shadows, we get no sense of depth and the true layout of the trees around us.

Have you ever noticed how difficult it is to get someone who's never used a telescope to actually see something through one? We can pick up a wealth of subtle detail in a faint nebula, they can't even find the eyepiece.