Indoor air pollution is a critical public health issue, especially in Kuwait, where cultural practices like burning Bokhour are widespread. This study investigates the gap between actual indoor air quality (IAQ) and public perception. We conducted real-time environmental monitoring of PM2.5, PM10, and HCHO levels, along with a structured survey (N = 300), to evaluate perceptions influenced by demographics, health status, and Bokhour usage. Results revealed that measured pollutant levels often exceeded WHO safety thresholds, yet public perception remained mostly “Neutral.” Ordinal Logistic Regression revealed no significant relationship between PM2.5 levels and perceived air quality, underscoring the human inability to detect air pollution accurately. Over 46% of respondents claimed they could detect poor air quality without a device, although the data indicated otherwise. Cultural familiarity with Bokhour did not significantly affect perception, nor did its usage frequency or individual preference. The study concludes that overconfidence bias distort awareness of indoor pollution risks. It emphasizes the need for public education and policy action to address the hidden threats posed by traditional practices and lifestyle factors.