Maybe the tech wasn't quite fool proof and they tried to fake it and then the fake version messed up.
I fully expect the AI to suck initially and then over many months of updates evolve to mostly annoying and only occasionally mildly useful.
However, the live stage demo failing isn't necessarily supporting evidence. Live stage demos involving Wifi are just hard because in addition to the normal device functionality they're demoing, they need to simultaneously compress and transmit a screen share of the final output back over wifi so the audience can see it. And they have to do all that in a highly challenging RF environment that's basically impossible to simulate in advance. Frankly, I'd be okay with them using a special headset that has a hard-wired data link for the stage demo.
So, the failure was apparently with the glasses Zuckerberg's wearing on stage not establishing a two-way video call while simultaneously streaming it's own interface for the live stream and big-screen. He said it worked dozens of times in rehearsal and one notable difference was that for the real demo hundreds of other wifi devices present in the room.
I have quite a bit of experience producing live keynote demos at large tech events, so I don't think I've confused about this. As an aside, when we're being shown "Zuckerberg's POV" through the glasses I believe that's actually something custom put together for demos because the normal glasses don't even have a mode which shows the wearer's POV. Creating that view requires sending both the internal output of the glasses, which is the corner inset overlay AND the full screen output of the glasses live camera - which are then being composited together backstage to create the combined image we see representing what Zuckerberg sees. Sending all of that while establishing a two-way video call is a lot for a resource constrained mobile device.