One major source of uncertainty in the cloud-mediated aerosol forcing arises from the magnitude of the cloud liquid water path (LWP) adjustment to aerosol-cloud interactions, which is poorly constrained by observations. Many of the recent satellite-based studies have observed a decreasing LWP as a function of cloud droplet number concentration (CDNC) as the dominating behavior. Estimating the LWP response to the CDNC changes is a complex task since various confounding factors need to be isolated. However, an important aspect has not been sufficiently considered: the propagation of natural spatial variability and errors in satellite retrievals of cloud optical depth and cloud effective radius to estimates of CDNC and LWP. Here we use satellite and simulated measurements to demonstrate that, because of this propagation, even a positive LWP adjustment is likely to be misinterpreted as negative. This biasing effect therefore leads to an underestimate of the aerosol-cloud-climate cooling and must be properly considered in future studies.