How come I was able to see the vapor
The complete question isn't very trivial. In fact, you're seeing the vapor just because a density gradient near surface of fog droplet changes the path of (light) energy spreading and a it causes a dispersion. And energy is the only source of information about droplets...
But to explain, why just a density gradient deflects the path of energy is not quite easy problem at all. AWT assumes, people have evolved by many gradients of time dimension (a "mutations") - so they're sensitive to spatial gradients of time events density. They can see nothing - but a density gradients.
Another question is, why droplets are formed above water after all. But this is a different problem. It just illustrates, how every answer brings another questions, recursively.
