(2018 MC5)

Because the flag has nothing to do with how close it came on the day. NASA marks an object a Potentially Hazardous Asteroid only if both of these are true of its orbit and its size:

• Its orbit can bring it within 0.05 AU of Earth’s — about 7.5 million km. This is the Minimum Orbit Intersection Distance, the closest the two paths ever come, not the distance on any given pass.
• It is big enough to matter — absolute magnitude 22.0 or brighter, which is roughly 140 metres across and up. That threshold is a planning convention, not a physical boundary: it is about the size at which an impact could do regional damage. Smaller objects are not harmless, they are simply outside this definition — the Chelyabinsk object of 2013 was around 20 metres and injured about 1,500 people with the shock wave from its airburst, without ever reaching the ground intact.

The two terms: AU — astronomical unit, the average Earth–Sun distance, 149,597,871 km. 0.05 AU is about 7.5 million km.
MOID — minimum orbit intersection distance, the closest the two orbits ever come, whatever the timing. See the glossary for NEO, PHA and H.

So a large rock passing at 39 million km today can be flagged, because on some future orbit it could come far nearer — while a pebble skimming past at 4 million km is not, because it would never reach the ground.

Three objects that all passed Earth on 30 August 2026 make the point better than any definition:

The middle one is five times larger than the flagged one and passed closer on the day, but its path can never come within 23 million km of ours. The last one’s orbit crosses inside the Moon’s distance — nearer than any other object here — and it is still not hazardous, because at a few metres across it would burn up long before it landed.

“Potentially hazardous” is a watchlist criterion, not a prediction. None of these is on a collision course; the label means an object is worth keeping precise track of over the coming centuries.