But I've also seen this with American and some English adults trying to learn Norwegian - a great many of them can't hear the difference between vowels which, to me, are totally different. Can't hear the difference between the words "har" and "her", for example (NB: Norwegian sounds. Not English vowels). It seems to take a couple of years of daily ear training (or rather, brain training). As always, there are exceptions. But those exceptions are truly standing out.
(Added: As soon as there's context or visibility the problem is much reduced - but it's still there, as soon as there's only audio and their language level isn't good enough to "select" the right words from context).