1.Ne5 here is misguided because it leads to the exchange of minor pieces, relieving Black of their relative lack of space and helping them to engineer the freeing ...c6-c5.
After 1...Nfd7! Black bumps both the knights and the bishops, forcefully leading to the exchange of White's most active pieces.
If White naively exchanges, 2.Bxe7 Qxe7 3.Nxd7 Nxd7, they only speed up Black development and after 4.0-0 0-0 followed by 5...c5, the White dominance of the center vanishes.
2.Bf4 Nxe5 3.Bxe5 Nd7 4.Bg3 is only marginally better : 4...0-0 followed by ...c5
Instead, with 1.0-0 intending e4 or the centralization of White's rooks, White keeps a small space advantage - although that should be very manageable for Black.
More ambitious is the thematic 1.Bxf6!? Bxf6 2.Ne4 intending Rc1 to expose the weakness of c6 and c5, e.g. 2...0-0 3.0-0 Be7 4.Rfc1 [4.Rac1 is of course reasonnable, depending which of a4 or Rd1 will be most useful] Qb6 5.Qc2 and Black still has to show how they plan to untangle their queenside. [5.Ne5 forces a concession but 5...f6 6.Nf3 Nd7 7.Qb3?! c5 is not convincing ; 5.Qd2!? intending 5...a5 6.Ne5 or 5...Nd7 6.b4 is not natural but interesting]