The New Externality for Block Themes

The name home suggests that the template will display the site homepage. This is true when the reading settings of the site are configured to display the latest posts on the front page. But if there's a static front page, then the home template will displays the post page, not the home page. So this is where the confusion lies and has for a long time as well,. but for block themes, it's more easily surfaced by people who aren't deep in the code.