On average, that’s true, but one of the things about really smart people is that they learn to overcome this (not completely, of course, but to a significant extent), very deliberately cultivating an awareness of how they know things and how sure they are of them.  (In philosophical terms, they think about and seek to improve their personal epistemic.)  When faced with hard questions to which none of the students have previously encountered the answers, the better students will start by saying “I don’t know, this is new” and then proceed to think it through and attempt an educated guess based on all available information.  In doing so, they’re both more likely to realize that they were confused and also more likely to come up with the correct answer.

The very dramatic nature of the differences reported in this story suggest that the test was carefully constructed.  If you use questions that are WAY too hard for the students, everyone will be confused and nobody will be particularly likely to come up with the right answer.  If you use questions that are just hard enough, the best students will get the right answer without being confused.  To really demonstrate the effect, you have to hit exactly the right level of difficulty — hard enough that the best students are confused, but easy enough that many of them can come up with the answer after thinking it through.  At the same time, you have to avoid questions that very obviously require unsupplied background information, because then even rather poor students would realize that they had a problem.  I bet the guy spent WEEKS putting together the test, to get it just exactly right so that the connection between confusion and understanding would make itself apparent.

Confusion also occurs in the learning process whenever any incorrect ideas you’ve held previously are challenged and corrected.  For example, if you’ve been taught chemistry based on the Bohr model (as is extremely typical, especially at the high-school level), particle physics will be very confusing to you at first, because you’re used to thinking of subatomic phenomena as particles, similar to macroscopic pieces of matter only smaller: tiny little pieces of solid stuff, like itty bitty marbles, with a constant size and shape and mass and charge and a well-defined position at any given instant, like little motes of dust.  None of what they tell you in your first day of particle physics makes any sense in that context (because what you thought you knew was in fact quite wrong).  So you get very confused for a little while, and then you begin to understand (hopefully, somewhat) more correctly.