Wave function collapse is a key concept in quantum mechanics that describes the process by which a quantum system transitions from a superposition of states to a single state when a measurement is made. In quantum mechanics, particles such as electrons exist in a superposition of multiple possible states, each with a certain probability. The wave function is a mathematical function that encodes all the information about the system and describes these probabilities.
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The idea the the wave function of a small observed system collapses "obviously" cannot be the full physical truth, only a very useful approximation of reality.
Because then are are hard pressed to determine the boundary between what collapses and what doesn't, and there isn't such a boundary, as everything is interacting, including the observer.
The many-worlds interpretation is an elegant explanation for this. Though it does feel a bit sad and superfluous.