Put more clearly: Foreigner says "blue eyes!". n is 2. If you have blue eyes and you don't see the other blue-eyed person top themselves, you conclude that you also have blue eyes as does the other person, and it's belly-opening time.
But when n is 100, that initiation is missing. No-one tops themselves the next day? Hardly suprising - there are a hundred of the buggers. There is no reason to start counting, no "hang on, why didn't ol' blue eyes over there kick the bucket?".
And, given that these are humans and not cronjobs, no-one is going to be patiently waiting day in, day out for 100 days to see when they'll all kill themselves. Drama can't even fester, since the tribesfolk are forbidden from talking about the issue. Life goes on, and over three months later, the foreigner's statement wouldn't cause a bloodbath :)
TL;DR: if you want to make a fancy logic puzzle, don't use 'humans with bizarre rules' as your subjects. :)
Also, the characters are definitively not 'completely rational', as they're also described as being 'devout' :)