The usual scenario for these type of incidents is that ATC make a mistake, which the flightcrew don't realise and struggle to comply with, possibly due to poor handling skills, resulting in a dangerous outcome.
In this case, the flight crew were challenged with a last-minute ATC instruction, which was perhaps unexpected but to them quite reasonable, they correctly read back, and the ATC had an opportunity to correct but didn't. The flight crew then successfully executed the requested approach, but also initiated go around when they saw a traffic conflict.
It is quite fanciful to think that if the single word "confirm" had replaced the word "understand" the whole thing wouldn't have happened. I really can't see what the crew did wrong here, it seems they are being blamed for being TOO competent.