Yep. Just like people.This is my biggest issue with it. It works right up until it doesn't. At that point the driver may have been lulled into a false sense of complacency and may be unprepared to take control.
Full disclosure, I have FSD Supervised but rarely use it. But my guess is, more and more vehicles will be on the roads with it whether I like it or not. I may try the new release tomorrow.