Anything other than "normalish" tends to be a failure in driving. I.e. stopping and throwing your hazards on when you're in the intersection isn't success just because there were even worse options to have picked. It's nice they were able to pull the fleet back and get the cars out of the roads during the problem though.

I think this was a failure. The gold standard should be that the if every human driver was replaced with an AI how well could the system function. This makes it look like things would be catastrophic. Thus, showing how humans continue to be much more versatile and capable than AI.

I suppose if you lower the standards for what you hope AI can accomplish it wouldn't be considered a failure.

I'd say yes. The goal of a self-driving car is to emulate humans. If the car is panicking and reverting to "extreme safety mode" in situations where a normal human is going to be fine, then that's a failure.