Deep underground in unpopulated areas works fairly well; we learned how to do it without fallout as early as the late 1950s. You're at dramatically greater health risk living downwind of a coal power plant.
Because they're Australians, Pacfic Islanders, gamblers that already visit Las Vegas, etc.
We already have the answer to "why test near where people live" from the 2000+ tests already taken place at Yucca Flat (fallout on Vegas & elsewhere), Emu Fields (Adelaide and a future British PM dusted with fallout), Castle Bravo (shat on people's lovely island home and created Gojira (allegedly)), etc.
With eight billion+ on the planet it's hard to test anywhere without affecting someone - hence the move away from above ground to below ground (Atmospheric testing was banned by the 1963 Partial Test Ban Treaty) and a later move to simulations only by the US (although not India, Pakistan, North Korea, etc).
Again, we've known how to prevent fallout via underground tests and carefully constructed tunnel layouts for ~70 years now. No one of influence in the West is proposing a return to atmospheric testing.
Actual tests of real weapons (not simulations) underground collapse mountains (North Korea) and affect fault lines, sub surface water flows, etc - these things will likely affect some people in a 200 km radius - and places with no one in that vicinity are hard to come by - generally you move people off their islands, off their land, or simply don't care.
Bingo
Why not? And where would you propose instead?