They don’t.
Their color changes based on mood, not environment. Hungry, tired, or cold = brown and grey while warm, well-fed, and angry => vibrant. They’re generally hard to spot anyway (they move slow and jerky, have excellent eyesight, can look around without moving their head unlike normal lizards, can hang from anywhere, etc.) and I think this all combined to produce the idea that they change color to hide.
Now there ARE animals like cuttlefish and octopi which can legitimately change color on the fly to match their surroundings, but not chameleons.
Source: have kept 2 chameleons as pets.
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