Even simpler.
Reflection and Refraction from buildings are near the receiver and therefore do not necessarily be shifted in time so much that they cause echos.
In aviation sometimes we have to deal with reflections from further away obstacles - then the time difference becomes noticeable. Especially at low bands. AM or FM doesn't matter at all.
Radio waves do not penetrate too far into buildings or the ground. Especially not in concrete buildings. In wooden houses a station may be received throughout.
Tunnels usually shield radio waves. But - some are reflected from the road surface than from the walls - that's why you can receive a station at the entrance even on high frequencies. Low band reflects better and might be received throughout the tunnel.
But consider this. Many tunnels are equipped with sending antennas - first for convenience - then for safety transmissions!
The same is valid for cell phones!