Why does pulling out main speakers from wall improve sound?

The brain can judge distance from sound specifically its reflections, speakers close to a wall create reflections very close in the time domain to the original sound this means your brain ’knows’ this is a small space. Speakers further in the room have a longer delay thus the brain hears a bigger space.

This. It’s all acoustics - treble/staging is very dependent on how pure the initial sound wave is when it hits your ears. Further from the wall, the back reflection is sufficiently delayed that your ears/brain can distinguish. Too close together (too close to wall), you can think it’s just "muddying" the wave.

I believe most know about the lower frequencies being less directional and therefore less depending on room placement (think sub anywhere in the room). For these less directional bass frequencies, room modes are more the driving factor (frequency response, or "boominess" vs "suck outs").

...and maybe look for another dealer (or at least confront the rep [who hopefully isn't the owner])... :-)

Even in a small room, getting those drivers out at least 32 inches from the front walls and side walls will be a dramatic, almost miraculous effect on the stage depth and width. Transients and micro details (trails) are only possible for that realism your ears crave. And yes, best free tween ever. This alone made the HUGEST difference for my system compared to anything else.

Speaker placement varies with every speaker system, there are no standards to really follow. You can check out the Cardas website, you will find their system for speaker placement in a room based on the room dimensions which is a good starting point. You can also try the rule of thirds for placing speakers, a third of the way into the room from the front wall and a third into the room from the side walls. Start their and move incrementally forward and back, side to side until a familiar recording locks in place. You will know when it happens. It might take many tries to find the right spot but you will be happy that you went through the trouble.

@k600r you are absolutely correct, I have 2 sets of speakers, one set has to be up against the wall or no more than 6" out from the wall, and the other set sounds better about 1/3 of the way into the room, both sound best pointed straight forward.

Moving around and forward is not only a good idea, your dealer was polite at best, but part of the experimentation and the experience. Not going into technical details as many have pointed correctly the reasons behind it but try to locate them in the room where they sound more coherent to your ears, with a wide range of musical material. Depending on your speakers and room you may find that it would be an easy job or one demanding a lot of effort. All you have to do is enjoy, listen and be patient.