It is one of the key decisions for selecting a product. Think about it, when you are in the supermarket and pick up a product that has caught your attention what is the first thing that you do? You typically pick it up and try to open the cap and smell it. If you don't like the smell you put it down, even if the product claims to be the next incredible magic potion that can make you look 20 years younger!!!
A typical fragrance is made of three different notes. The top note gives you the first impression (citrus, flowery etc..). This is the volatile component of the fragrance and usually quickly fades away. Then the middle (heart) notes comes through which makes an impression once the top note is gone. It is usually well rounded and pleasant. Sometimes a combination of fruit or floral tones infused with spices (lemongrass, rose, nutmeg etc). The third pillar of a typical fragrance is a base note. The base notes lingers with the heart note to leave a lasting impression and stays on the skin hours after the top note is gone (sandalwood, vanilla, amber etc..).
It is the beautiful first impression (the top note) and its volatile reaction that becomes sensitizing on your skin. This is true for all skin types, not just the sensitive or redness prone skins. Think about a mosquito bite. We all are bitten when we are around mosquitos. Some of us react to the bite by showing a massive red bump while the rest of us just don't quite react to it as much.
Our skin is very good at hiding the irritation from interaction with a product's fragrance while it's been aggravated. You may not see the damage for some time but this damage is cumulative and silently happening every day. This can lead to minor problems in short term but more serious ones in the long term.
This is similar to sun damage. You may not see the skin damage for sometime but your skin is getting damaged by sun everyday while it is unprotected.
So why do companies use fragrance given what we know of their effect? Because as mentioned, it is one of the key reasons why people select a product and it also covers the base ingredient's real smell (from active and non active ingredients).
So I guess next time, you are in love with how your moisturizer smells, just keep in mind what's happening on your skin as you enjoy the beautiful fragrance. Is the sensory pleasure enough to overcome the damage being caused?