The shell expands a pattern into a list of names before the command runs. That expansion is the reason wildcards work, and the reason they sometimes match more than you meant. The pattern is not a filter inside the program, it is a list the program is handed.
About 1 min of reading
Preview an expansion before acting.
Set up mixed files
Before you run it, say out loud what it will print. Then open the answer.
Preview
Before you run it, say out loud what it will print. Then open the answer.
See the no-match case
Before you run it, say out loud what it will print. Then open the answer.
Put echo in front of the pattern, or run ls on it, and read the list. Seeing the names is faster and more reliable than reasoning about what the pattern should match, especially under pressure.
'*.txt' is the literal text, not a list. That is the right thing when the pattern belongs to the program rather than the shell, which is the difference between grep patterns and file names.
*.txt matches every name ending in .txt, log?.txt matches log with one character. The shell replaces the pattern with the matching names, so the command sees a list, not a pattern.
When nothing matches, some shells hand the literal pattern to the command, which then complains about a file called *.txt. That message is the tell: nothing matched, and your assumption about the names was wrong.
*.txt does not reach into subfolders. A pattern that should cover nested files needs a different tool, find, which walks the tree deliberately rather than expanding one level.
Each one is defined here on this site. Open the entry for the full definition and the other words it points at.