The size of the Bulgarian army steadily rose over the course of WW1, so at the start in October 1915 there were 616,680 soldiers (approx. 12-13 percent of population) and by 1918 at the Battle of Dobro Pole, the number of soldiers was between 855,175 and 877,392, which would have been equal to 18 percent of the entire population and upwards of 40 percent of the adult male population. So yes, it was exceptionally large and the largest army in WW1 by proportion to population.

One of the simplest reasons in explaining the Bulgarian army size, was the fact that Bulgaria actively recruited soldiers in occupied territories in Greece and Serbia, whereas most other countries did not recruit beyond their pre-war borders. The Macedonians, a south Slavic group that is closely related to Bulgarians in history and language (if not arguably the same.. and widely accepted at the time to be Bulgarian), were mobilized and 133,837 ethnic Macedonians (15 percent of army strength) were included in the ranks of the regular Bulgarian army.

The first wave of Macedonians were deserters from the Serbian army who joined the Bulgarian army from the onset in 1915. The leadership of the IMRO supported Bulgaria and initiated a recruitment drive of the local population, and they were used as auxiliary forces to garrison the area and in events like the Toplica Uprising (1917) by Serbian-Chetniks, it was the IMRO that was essential in suppressing the revolt, securing supply lines and keeping the Bulgarian army at the front. The 11th Macedonian Infantry Division was one of the first Macedonian military units to be raised in 1915 and was commanded by Macedonian-born Aleksandar Protogerov and comprised 35,000 soldiers. Many other divisions were raised out of Serbia's Macedonian population as well as a few thousand Macedonian recruits in Greek territories that were occupied by Bulgaria.

Even without the Macedonian explanation, the Bulgarian army was still very large and this can be attributed to a few reasons.

With regards to the economy, the Bulgarian army was funded through loans and supplied with armaments from Germany and Austria-Hungary, and this was part of the deal made during negotiations in the summer of 1915 that Germany would provide whatever war material needed by Bulgaria unless it was harmful to Germany's war needs and this was in return for joining the Central Powers. After Serbia fell, a railway link was established from Sofia to Berlin and the Germans supplied both Bulgaria and the Ottomans this way. So less men were required in factories, as the Bulgarian army did not have to rely on domestic production. As for shortages of supplies, the Bulgarian army faced shortages of uniforms and boots and ammunition for nearly the entire duration of the war, which is why there was a collapse in morale among soldiers by 1918 due to these shortages.

The second reason for the large army size was that Bulgaria was a very militarized society, even for its time, and had a very militaristic Tsar. They had a Narodno Opalchenie (people's militia), large reserves that came to form the backbone of the army, and had never really demobilized their army from the Balkan Wars and retained a large standing army of nearly 150,000. Bulgaria had sophisticated mobilization plans (that were sped up in 1914) in place for a future war at reclaiming the territories they had lost in the Balkan wars. New military academies sprung up to train officers, and around four new divisions were created annually from new conscripts and this would have totaled 214,343 soldiers between 1915-1918. Bulgarian casualties (about 88,000 dead) was also low compared to other countries, so troop replenishment wasn't as essential.

Even during initial mobilization in 1915, universal conscription was in-place and the army subjected men ages 18-46 for recruitment so the goal of the Bulgarians early-on was for an overwhelming invasion of Serbia (as planned in coordination with Germany and Austria-Hungary) and then to dwindle their numbers down from then on until the war would come to a conclusion elsewhere. This did not come to pass since the Salonica front with Greece opened up in 1916, and Romania joined the war that same year, so troop numbers were kept and then increased although at the detriment of Bulgarian society that suffered from food shortages and a declining economy.

Conclusion:

The Bulgarian army was indeed very large proportionally although it did not comfortably retain these figures and had to rely on their allies, which without them would have been materially impossible for Bulgaria to mobilize the number of soldiers they had.

Where are you actually getting that number? I've never heard it being that many men. Actual numbers I found (from Krapchanski^[1]) are 15 908 officers and 600 772 sergeants and soldiers at the end of September, 1915, and 855 175 men total by 1 September 1918, and after those last numbers he writes that "there was no opportunity for refreshing the army" (well, in Bulgarian, but hopefully I didn't mess up the translation, "refreshing" sounds kind of awkward).

The wikipedia article on the mobilization has this massive 1.2 million number, and cites The European Powers in the First World War: An Encyclopedia^[2], more specifically a table on pg. 173, but:

• this 1.2 million number is in the column Total Force Mobilized, so it doesn't necessarily mean these 1.2 million men were all mobilized at the same time - around 600 000 were mobilized at first, and as time went on, more people were mobilized, but obviously some of the initial 600 000 weren't in the army anymore (dead or injured).

• it's explicitly stated that "many of these figures ... are approximations or estimates", so it might not be a fully accurate number.

The first source I cited is from the government military publisher (don't know if there's a proper term for that in English), and while it's from 1961, the figures seem to be based on documents the military had, which I assume are reasonably accurate. So the 1.2 million number might simply be incorrect.

[1] В., Крапчански (1961). Кратък обзор на бойния състав, организацията, попълването и мобилизацията на българската армия от 1878 до 1944г. военно издателство, Sofia, p. 112, p. 114

[2] Spencer Tucker. The European Powers in the First World War: An Encyclopedia. Taylor & Francis, 1996, p. 173

Hopefully I cited things properly. Note that the first source is in Bulgarian, so it might not be very useful if you can't speak the language, although you can still read the numbers. The title translates to "A short survey on the combat composition, organization and mobilization of the Bulgarian Army from 1878 to 1944".