arXiv:2610.33565v1 Announce Type: new Abstract: Robot policy evaluation informs deployment decisions and policy improvement, but physical testing and simulator preparation require substantial effort. World models offer a complementary route through closed-loop interaction in generated environments. Recent benchmarks have demonstrated their potential as policy evaluators through outcome-based evaluation (i.e., assessing task success or failure). However, such evaluation does not establish whether world models faithfully simulate how policies fail. Misrepresenting failures can lead to incorrect diagnoses of policy weaknesses and make policies appear ready for deployment even when small scene changes cause them to fail. We therefore ask: do world models faithfully simulate how and at which stages policies fail, and under what conditions they transition from success to failure? To answer this question, we introduce WorldFailBench with three evaluation tasks. Failure reason tests whether models reproduce the observable errors policies make. Failure stage assesses whether failures concentrate at the same stages of full-task execution. Failure boundary examines whether models reproduce the conditions under which policies transition from success to failure under controlled scene changes in simulation. The benchmark covers manipulation tasks in the LIBERO and RoboTwin simulation environments and real-world manipulation tasks performed by the G1 humanoid robot. Experiments across seven world models reveal substantial gaps in their understanding of policy failures, providing guidance for developing more reliable world models for policy evaluation.