Ok, got it, not sure how I missed that based on you first post. So you are exactly rite, it looks like the error messages were put in the wrong places. On your page if you are in split view select the confirm input then look in the code, just after this input you will find this code:
<span class="confirmRequiredMsg">Your password entries
do not match.</span><span class="confirmInvalidMsg">A
value is required.</span>
Just looking at these it should be obvious that they are switched around, you can just reverse this html to look like this to get it to work:
<span class="confirmRequiredMsg">A value is required.</span><span class="confirmInvalidMsg">Your password entries do not match.</span>
When I do this I get the result that you would expect from this interaction. Sorry for not seeing it the first time through. I have also logged a bug for this, hopefully it will be fixed in the next release that is created.