This is insanely puzzling to me, and very much unexpected. Can someone ELI5..? Or maybe ELI15 would be enough.
Because Remainers don't want Brexit at all, and Leavers mostly don't want it on the terms of the available deal (split between those who want a better deal and would prefer remaining to leaving on the offered terms and those who would prefer no deal to the offered terms.)
> This is insanely puzzling to me, and very much unexpected.
That no one liked the deal May managed to negotiate has been clear for some time—it's why the vote was delayed for weeks of desperate effort to find some votes—though it being by far the biggest loss on any vote for a British Government pretty much ever is somewhat impressive. But it's also a sign that May wanted the loss on record—they had to have a whip count and known it would be a horrible defeat and yet went forward with it.
"Brexit" is possible, but it would be in all cases disastrous for Britain. This is obvious. But Brexiters don't want a real-world Brexit they want a fantasy land Brexit where they have every single benefit of being part of Europe and the EU but they want to be able to ignore any obligations "imposed" upon them by that very advantageous relationship. This is, of course, a childish and unreasonable position, nevertheless a great many people were convinced that it was really quite reasonable or that at least that voting for Brexit was a show of solidarity representing British Independence and Strength and yadda yadda yadda, etc. Unfortunately for them, a majority of voters were fooled into voting for Brexit, causing it to pass out of the fantasy realm where it was a meaningless signal of political beliefs into the realm of reality where it will be an unmitigated clusterfuck of epic proportions if it is carried off. Indeed, I suspect if a second referendum were held the following week after the Brexit vote, with the restriction that only those who voted in the first could vote in the second, it would have gone down in flames.
The complication here is that the current party in power, Theresa May's coalition, has a very tenuous hold on that power. They know that if there are new elections they are out. And May knows that if she doesn't kowtow to the Brexiter minority in parliament then her coalition will crash and burn. So she's trying to hold onto power (until 2022) by going through the motions and doing the best she can without any possible clue how to actually get through this mess.
Which comes back to the core problem again. The majority (now) do not want a Brexit. While the Brexiters want "Brexit, but good for Britain" which is an impossibility.
Everybody on both sides considers the deal a huge compromise and hope that by voting it down, their prefered solution will become viable.
I bet however that if this deal was put to a single ranked vote against all other options, everybody would put it as nr 2 and it would comfortably win.
I don't think there is consensus on what all other options are. It's clear that options Constitutionally available to Parliament and within it's power (i.e., no external approval needed) include no Brexit, the deal they just rejected for a near-immediate Brexit, and no-deal near-immediate Brexit, as well as a snap second referendum (which isn't an outcome option, but it is a political option which differs from unilaterally choosing an outcome option.) But it's clear that there are parties that thing that a a better-deal Brexit and/or a delayed Brexit (or delayed decision on whether to have a Brexit) are acheivable options.
OTOH, I think there are probably plenty of people who rank no deal and no Brexit both ahead of the deal on offer.
For it to be defeated by such a margin, it had to receive cross-party rejection. 118 Conservatives voted against it (with 196 voting for), it was proposed by a Conservative Government.