But if some people lack the understanding ability to even realise that they lack understanding, how do you tell them?

Nightmare.

You don't. Pretty sure the last instance where this happened the other person thought I was just anti-AI when I voiced my displeasure. I don't think the actual problem registered

How others in office context attempt to use it is starting to annoy in general. Had a case today where someone wanted to use copilot to classify something that is situation/company specific & out of distribution. There is just no understanding beyond "its a magic answer box"