I am not sure whether I missed something from this very long thread but I wanted to add an extra example.
This problem occurs widely even with VERY common species of mammals. Not only you get suggested a list of species which don’t even occur in the whole continent, you also get a “we are pretty sure this in the family:” suggestion which links you to the wrong family. The family suggestion is obviously linked to the wrongly suggested top species so even the cautious newbie who wants to be on the safe side fails in assigning a family ID.
Here is a very fresh observation in which the problem occurs:
https://www.inaturalist.org/observations/24287951
A very common european rodent (Apodemus, family Muridae) is being wrongly assigned to american species (in the genus Peromyscus, which does not occur in Europe) and of course also assigned to the relative wrong family (Arvicolidae) by the algorithm.
I correct several of these easily avoidable mistakes and this leads me to think that geography is absolutely not taken into account.