Both the first and last words have repeating letters, so they fail under that interpretation too. There would have to be a bizarre interpretation that consecutive-repeating letters are counted as one, but non-consecutive are counted separately, for its response to be considered correct.

An AI aware of how to optimally answer questions put to it would find the least objectionable interpretation when one is a subset of the other. It also failed by not constructing a simpler sentence, like subject-verb-object or subject-verb-adjective-object, since its limitations related to letters and tokens, and its failure to double check its answers before output, mean it can make errors. The more it writes, the more chance it has of making an error.