Those who lack understanding think of me, the unmanifest, as having come into manifest form, for they do not know my higher nature, which is imperishable and unsurpassed.
Explanation
Krishna has just said that worshippers of lesser gods get limited results. Here he says that people of little discernment (abuddhayaḥ) take him to be an ordinary being who has newly taken a form, missing his higher, imperishable nature (paraṃ bhāvam). Traditions differ: Advaita readers take the unmanifest as formless Brahman, while devotional schools stress that Krishna's form is itself eternal and divine.