Harmless
To be honest the paradox makes perfect sense. Mans a funny creature, doomed to the chambers of his own skull. Yet an odd compulsion to others, whether that be in kind or not. For a human creature to understand anything beyond the windows of its chamber that thing needs to exist in a perceivable way. People do not exist in a perceivable way, they exist in a skull. If all anyone can go off is one and others byproduct we give ourselves an edge when assessing. Simply put an individual weighs the full unabridged complexities of their own self against the often two-dimensional shell of the masses. It’s no wonder one gets the feeling they are more in the right or intelligent or moral than the trivial outer shell of society. When asking someone to assess themselves you are granting them permission to judge on their own metric.
As for physical analysis, It's more of an out of sight deal. If one is not actively engaged in physical activity they don’t really have too much to pull an accurate assessment from where as individuals who do often become proficient due to repetition. People whose byproduct suggests excellence are viewed as rare or exceptions or altogether not considered when assessing one's self as those individuals personify their own excellence and no longer feel relatable. People who are perceivably excellent are, even further, harder to find if one is not searching for them. As an all encompassing statement, people generally do not like feeling unexceptional. There really is nothing wrong with that.
This state is often the default. People tend to get driven further and further within their skulls until only what's within their realm of immediate perception is all that makes up reality. What do you expect? I doubt many reading this even fully grasp how unimpressive they probably are. If they do It’s certainly being done with a pat on the back for how much better they are than those that don’t. It’s a hard mindset to break, it's harmless and it's trivial.