IRV, on the other hand, does not encourage candidates to drop out, allowing the voters to express their views more clearly.
Almost all Palin voters would have preferred Begich to Peltola, so they could have gotten a better result by lying about their preferences and strategically voting for Begich as their first choice. Expressing their views honestly resulted in a worse outcome than if they had expressed their views dishonestly.
Among voting nerds this failure mode is referred to as "favorite betrayal" -- https://electowiki.org/wiki/Favorite_betrayal_criterion
That's literally the opposite of what it does. Palin should have dropped out, or her voters should have dishonestly ranked her second, so that the win would have gone to a Republican instead of a Democrat. IRV did not prevent Palin from acting as a spoiler and did not make it safe for voters to honestly rank the candidates.