File System Review Quiz

In the “Working with Files and Directories” section of the learning material, the documentation references that in a Unix-like system, the word file refers to any entry within a file system:

"In Unix-like systems, the word "file" has two meanings. It can mean the collection of data that is 
 some information, like an image or a spreadsheet. It also is a generic term for any entry in the "file 
 system". You see, it's called a "file system", not a "file and directory system". So, in this case, when 
 you try to create a directory that already exists, the command is using the second definition of "file" 
meaning something in the file system."

One of the questions in the File System Review quiz directly contradicts this, stating that file is not a correct term for something that can contain a file or directory.

Can someone explain the flaw in my thinking or confirm that the documentation is actually confusing?