Agreed, was so surprised when calculation for the term structure model is model 1. I have expected a Ho-Lee or a vasicek.I can certainly empathize with your stance. However because Covid forced most companies to go to a full remote working situation, BCP/DR/Ops risk is top of mind of most risk practicioners today (certainly at risk committees we're talking about it endlessly these days) and plus with markets melting upwards a lot... the market risk side seems like its the "dull" one relatively speaking! Odd times indeed and definitely odd to make a test around just the recent events... the test I think was trying too hard to be relevant and forgot to bring it back to the fundamentals (that we all crammed for) lol... just my two cents!
Merton and KMV also, was expecting they would at least test us debt = Risk free bond - put option of firm or the calculation of credit spread, but none of these appeared.