Assuming it’s an accurate report, the last two paragraphs claim that the car spotted the poor lady but failed to identify her and did not take any avoiding action. That seems to suggest the software could have done better.
I agree, but these vehicles are being tested to improve the software, which is the reason there is a "safety driver". There is a difference between a driver who is less than 100% alert and vigilant and one who is watching telly.
Regarding the hours the driver had done, I have no idea what the US legislation allows for these tests, but as a business, I would imaging Uber would push the hours to the limit. But there again, she may just have come on shift.