Absolutely correct Shore Guy. TCAS is very bad in azimuth, and I would never attempt to maneuvre lateraly on account of TCAS alone.
For instance , if intruder is dead ahead , slightly ( say 5 deg) on the right of your centreline on TCAS display, the aircraft can be indeed on the left by 5 or 6 degr... Azimuth tolerance on TCAS is 11 degrees. TCAS was never made for this.
I do not believe the number of false / erroneous RAs have not significantly changed with Version 7 even if the reports do get less. This is probably due to the fact , that since nothing hapens after reports are sent ( and nothing can currently can be done as the TCAS team has been disbanded by the FAA) peolple tend not to file reports anymore if it is not involving a safety issue .
The events that involved false mode C encodings and a/c picking up their own transponder have been solved has they were transponder problems not involving TCAS logic.
To echo HD, no an RA is definitively not only when ATC failed. In fact virtual level busts ( you intend to level off , but your vertical rate is that high that ACAS beleives you will not level off and trigger an RA ) are still , and by far, the most number of TCAS RAs.
Version 7 has reduced those numbers ( by delaying the trigger of the RA) but they are still there.
From a philosophical point of view, you would like to keep those RAs as , even if the intruder pilot intends to level off, you never can be 100% sure he will. And if you both follow the RA as intended, both a/c will only move 3 or 400 feet .
The only way to eliminate those is to reduce vertical rate before level off to 1000 to 1200 ft/min maxi.
Some Airlines ( BA is a good example ) already recommend this , but some others ( in the US especially ) refuse to apply this, arguing that TCAS is a tool, and therefore it should be modified, not having pilots adapting to a tool.
Both arguements are valid. TCAS is definitively not something easy , becauses it mixes crude blind automation with human (re)actions.
TCAS is not HAL ( from 2001 a space Odyssey for the youngsters ) but is the closest thing we have build yet.