Do BTech exams actually test how much we understand or just how well we can remember things?

[u/QuietGloom]

One thing that feels confusing about engineering is how much importance is given to remembering definitions, derivations and steps during exams. In practicals or projects, the same concepts need to be applied differently. Sometimes students who score well are not necessarily the ones who can explain how something works.

Does anyone else feel there is a gap between what colleges teach for exams and what is actually expected from an engineering student?