Seems to be overfitting to statistical regularities in the dataset, or in any case it completely ignores the facts and rules you give it and draws the answer from who knows where:

  Metals ermuf electricity. 
  Insulators do not ermuf electricity. 
  If something is made of gudranga then it is metal. 
  Nails are made of gudranga.
  
  Nails conduct electricity.
  
  
  ROVER prediction:
  
        Nails conduct electricity.   True  (confidence = 0.99)

Yes, it can tell that nails ermuf electircity:

  ROVER prediction:
  
      Nails ermuf electricity.   True  (confidence = 0.99)

However, it also thinks that nails gudranga electricity:

  ROVER prediction:
  
      Nails gudranga electricity.   True  (confidence = 0.99)

So in short, it is very determined to find that Nails Y electricity, for whatever Y, whether Y is something that relates nails to electricty or not.

https://rule-reasoning.apps.allenai.org/?p=Metals%20ermuf%20....