Harmonic radar is a special radar system that has been widely used in insect tracking, search and rescue, and electronic equipment detection in recent years due to its excellent anti-clutter capability. However, in complex close-range scenarios, harmonic radar still suffers from nonlinear clutter interferences, which will cause a large number of clutter false alarms and seriously affect the performance of target detection. This paper analyzes the mechanism and the characteristic of nonlinear clutter through experimental results in complex close-range scenarios. It is found that the nonlinear clutter is generated by the harmonics and intermodulation components of the multipath signals. More importantly, it is the first time for the multipath intermodulation phenomenon to be revealed in harmonic radar with frequency-modulated waveform. A nonlinear clutter signal model is developed to explain this special phenomenon in this paper. The proposed theory is verified by the simulation and measurement results. The work in this paper lays a theoretical foundation for the subsequent work on nonlinear clutter suppression.