As the price moves, the pool sells the token that is rising and buys the one that is falling.
So a position ends up worth less than simply holding the two tokens; the further the price moves, the larger the gap.
It is only impermanent if the price comes back. Fees are what a liquidity provider is paid for carrying it.
The gap is measured against holding: what the same two tokens would be worth had they never been deposited.
A narrower range turns the same price move into a larger gap, because the position converts faster.
Each pool page here draws the gap at every price across the range, next to the fees the pool actually charged.