Why are LMS and XMSS not candidates in the Post-Quantum Cryptography Standardization process?
Can anyone explain why?

That is because NIST specifically stated that stateful schemes were not allowed in the NIST postquantum competition, because they could not be implemented using the API that NIST has defined (which does not allow any state).
That would appear to be reasonable, as stateful hash based signature methods do need extra care to implement safely; NIST 800-208 outlines what NIST believes are reasonable precautions - those precautions are not needed for other algorithms, and hence NIST kept those separate.