"Well, how does one verify that an entity understands what a rock is? "
For starters, it would mean, that it can reliable detect a rock on an image, e.g. recognizing the characteristical traits of a rock.
Currently a apple gets recognized as an iPod, when there is a label on it saying so.
"When we put a label saying “iPod” on this Granny Smith apple, the model erroneously classifies it as an iPod in the zero-shot setting,’ "
https://www.theguardian.com/technology/2021/mar/08/typograph...
So this specific flaw might have been fixed by now, but the general shortcoming is, that it has no understanding of the concept of an apple.
Or a rock. Or a human. It just "knows" certain pixels arranged in a certain way get the lable apple.
"The education system clearly has no idea how to test for understanding of literally anything."
And that is very strong hyperbole. There are many, many flaws in the education system, but they do know how to test knowledge (in person). They just do not know how to scale it cheaply, hence the stupid multi choice tests and co.