I think your questions would be answered by reading the article. Particularly:

"In AI and machine learning, bias refers generally to prior information, a necessary prerequisite for intelligent action (4). Yet bias can be problematic where such information is derived from aspects of human culture known to lead to harmful behavior. Here, we will call such biases “stereotyped” and actions taken on their basis “prejudiced.”"

This definition is not unusual. This is about inferences that are wrong in the sense of prejudiced, not necessarily inaccurate.