I had the strangest problem with Swedes where they'd seem to speak perfect English, but repeatedly mishear me as saying something offensive and never stop to make sure.

Actually I think I mentioned "cutting myself shaving" to someone and they apparently to this day believe I'm suicidal.

Haven't seen it myself, but I'm guessing it's a bit Dunning-Kruger effect + unwillingness to ask outright (the average Swede don't want to look silly, etc). While we have a significant exposure to English, few of us regularly have casual conversations with native English speakers, so our vocabularies aren't as good as we tend to think.