The BMI scale only works if everybody has the exact same body type, weight distribution, etc. A scale that only works in a vacuum is essentially worthless. Can it serve as a baseline? If you want it to, sure, but your mileage will vary and fairly greatly.

Athletic, muscular people can still be overweight

Yeah, if you use a scale like BMI. If somebody is at a healthy weight they are not "overweight". According to BMI I would be "obese" if I weighed 235. It the middle of a bulk phase of rugby season I have gotten to that no problem and even at that weight not a single person (doctor's included because of physicals) has ever considered me to be over weight much less obese. A reliable scale should not have such a high degree of error.