  We perform a thorough analysis of the projected shapes of nearby galaxies in
both observations and cosmological simulations. We implement a forward-modeling
approach to overcome the limitations in previous studies which hinder accurate
comparisons between observations and simulations. We measure axis ratios of
$z=0$ (snapshot 99) TNG50 galaxies from their synthetic Hyper Suprime-Cam
Subaru Strategic Program (HSC-SSP) images and compare them with those obtained
from real HSC-SSP images of a matched galaxy sample. Remarkably, the comparison
shows excellent agreement between observations and the TNG50 simulation.
Specifically, for galaxies with stellar masses $10\leq \log
(M_{\star}/M_{\odot}) \leq 11.5$, we find $\lesssim 0.1\sigma$ tensions between
the observation and the simulation, whereas previous studies found $\gtrsim
10\sigma$ tensions due to lack of thin galaxies in simulations. We reveal that
low-mass galaxies ($M_{\star}\lesssim 10^{9.5}$) in TNG50 are thicker than
their observed counterparts in HSC-SSP and attribute this to the spurious
dynamical heating effects that artificially puff up galaxies. We also find that
despite the overall broad agreement, TNG50 galaxies are more concentrated than
the HSC-SSP ones at the low- and high-mass end of the stellar mass range of
$9.0\leq \log (M_{\star}/M_{\odot}) \leq 11.2$ and are less concentrated at
intermediate stellar masses. But we argue that the higher concentrations of the
low-mass TNG50 galaxies are not likely the cause of their thicker/rounder
appearances. Our study underscores the critical importance of conducting mock
observations of simulations and applying consistent measurement methodologies
to facilitate proper comparison with observations.
