My problem with Kakashi's tests of teamwork is that Team 7 didn't pass because they were special compared to the team's that Kakashi had failed previously. Team 7 passed not because of performance, but because of a shift in Kakashi's personal mental state.

Kakashi's approach to the bell test was wrong. His struggle to find a team that could display teamwork wasn't so much about the poor performance of the teams as it was Kakashi projecting his personal issues onto his students and taking out his frustration with his own personal flaws and guilt out on his students. Which is selfish, unfair, and immature.

By the time Kakashi gets to the point of his life where he is being pushed to take on a team of his own, Kakashi is in an incredibly unhealthy psychological state. Kakashi can't handle the trauma of his past and is crushed under the pain of guilt. Unfortunately, he projects his personal problems onto his students, which is problematic.

Another problem with Kakashi's bell test is the motive behind Kakashi's bell test itself: Kakashi wants a trio of children to already be experts at teamwork. Already Kakashi is treating his title of sensei as superfluous and shirking responsibility as a teacher. Kakashi's job isn't to expect young, immature kids to have life all figured out by the time they make it on his team. Kakashi's job is to teach his subordinates teamwork, not expect them to come as pre-packaged teamwork experts.

After all, even Kakashi recollects that in his own test, he hadn't really used teamwork; he'd just used his teammates to his advantage. Yet now Kakashi somehow believes he's an expert authority on teamwork when ironically Kakashi is still completely clueless about what teamwork means.

Not excelling at teamwork from the get-go with people you barely even know doesn't mean teamwork can't ever be learned, and it seems too harsh for Kakashi to fail kids just because they don't immediately excel at teamwork in one particular contrived scenario. Kakashi's test makes apparent his personal trauma and deeply unhealthy mindset.

I don't have a problem with Kakashi failing his first squad, since that trio had no sense of unity and some violent-minded "solutions" to their problems, and it was worst performance in a bell test I've seen in the series.

But Kakashi's mindset is a problem. Kakashi has this manic obsession with teamwork. to the point where he's over-compensating for that one single aspect while ignoring other traits that might indicate a healthy team dynamic. Kakashi is trapped in a world of miserable paranoia. Every day he blames himself for the deaths of Obito and Rin. He has become psychologically stuck in that rut, virtually unable to see anything else except his mistakes. It becomes so bad that he begins projecting his personal faults and mistakes onto others (in this case, his prospective students) and punishes them for his past failures, instead of actually viewing the people around him as they truly are, in the present. Kakashi looks around at everyone and all he ever seems to see is himself and his mistakes.

Kakashi has gazed so far inward that he's become utterly lost in himself, leading to him becoming self-absorbed and depressed because he can't have any deep connection with anyone outside of himself until he lets go of his self-absorption, stops ignoring and shunning the friends trying to reach out to him, and stops projecting his flaws on to the students who need his guidance and help.

Kakashi's first squad clearly wasn't a good team, since they were overly vicious and their behavior indicated mutual disrespect and bloodthirsty resolutions to problems, so it was better that they learned to cool off and mature some more at the academy before becoming official soldiers.

While Kakashi was right to fail these three, Kakashi's paranoia is still problematic. Kakashi doesn't really care about teamwork, he's just stuck in the horror of feeling guilty for being bad at teamwork himself when he was a chunin. As a result of his own lack of teamwork during his chunin years, Kakashi believes that is why Obito and Rin died. So Kakashi is acting out of terror that there will be another kid like him who will shirk teamwork and get his team killed as a result, just like Kakashi once had done.

Paranoia and traumatic personal issues are never something a teacher should shove onto his students. Kids have plenty of problems of their own without an adult adding his personal issues to the pile. Kakashi should have never agreed to teach kids if all he is going to do is criticize kids for his own personal flaws.

I don't have a problem with Kakashi failing this team, since they were incredibly mature and deserved to fail. The resolution to the trio was fine too. When Kakashi is out walking one day, this failed squad rushes up to him, announcing that they've shaped up in their behavior and are now such admirable role models that they'd been put in charge of disciplining the younger academy kids and taught them to be respectful and courteous.

I feel like the episode was trying to sell the idea that Kakashi failing them was the best thing that could have ever happened because look how great they turned out. Kakashi's decision to fail them resulted in them later developing into well-behaved students, though it ignores the fact that someone else taught them to be more polite and well-mannered in the years between, and that person wasn't Kakashi. I don't feel like Kakashi really deserves a ton of credit here; whoever put in the work disciplining those boys and teaching them some manners over the past couple of years deserves the credit.