Why can't people distinguish Sailor Soldiers from their real selves? When people transform in Sailor Moon, they look physically identical to their human forms.  Even fellow magical beings are unable to tell a person's identity unless they witness the transformation happening.

Is there an in-universe explanation for this?
It's a common trope in a lot of super hero fiction. It's just one of those things that creators ask audiences to suspend disbelief for. Though it's not really meant as an explanation, many characters do poke fun at various scouts' paper-thin disguises in universe, saying things to the effect of "She can't be Sailor Moon; Sailor Moon is too pretty to be that meatball head." (It must be the tiara.)