It's not a conversational model. It's meant as a local tool calling model.
That's exactly what they were testing and what it failed at
Yes, and it seems the tool called here was the thermostat, to set the mode literally the opposite of what was requested.
"Make it warmer"
tool that cools room called
Yes, I think OP understands that. What he and many others in this thread are trying to understand is what makes this model useful.