Why does computer animation look real once it simulates light instead of faking it?

Because it stops painting the look of light and starts calculating what light would do. Physically based rendering, or PBR, renders images by modelling lights and surfaces with the optics of the real world. It rests on the idea that, in the real world, everything is shiny: even matte surfaces such as concrete reflect a small amount of light, and many metals and liquids reflect a great deal.

The rendering equation, introduced into computer graphics in 1986 by David Immel and colleagues and independently by James Kajiya, says that the light leaving a point on a surface is the sum of emitted light and reflected light. The light arriving at that point usually comes from the outgoing light at other points in the scene. Path tracing solves the equation approximately, by tracing rays from the camera that bounce in random directions and averaging the results over many samples per pixel.

Path tracing was very slow on the computers of the 1980s and 1990s, and most animated films until around 2010, including Pixar's, used a different method, with ray tracing used selectively. Before the new system, Pixar's artists had to build reflections and shadows manually. Monsters University is described as the first Pixar film to use global illumination, a lighting system that imitates the behaviour of light in the real world, which automated the process and delivered more realism and soft shadows. Accounts differ on the milestone, though: another source names Finding Dory (2016), made after Pixar rewrote its RenderMan software for path tracing, as Pixar's first feature-length path-traced film.