There’s a couple times (not many) in volume 1 where the MC jumps the gun and mentions something that would be better to not be said around a certain sharp character but aside from that, I can’t think of any other example of misunderstandings on the other volumes, well, besides the usual ecchi misunderstanding once in a while that is normal for ecchi series like this one.
The second one would be regarding the MC being a weak Demon King, this is actually something pretty subjective, he can make strong attacks with his fire sword and even with his fists, but one needs to remember that his main abilities are only 2 lewd magics and that’s it, so it can also be said that he is a strong and a weak Demon King at the same time.
Now going for a more objective view, for starters the series already tells you from the very beginning that the game is still under development and by the dialogues between the characters it’s quite obvious that it’s nowhere near it’s completion so the classmates being strong (specially since it’s mentioned that the speed of leveling up depends on each individual iirc) and other game errors (that do appear later) should not be surprising.
For some people (like me) it makes things a lot more interesting since the MC has to actually face hardships and start using his head, which creates some pretty interesting developments later on, now for others that prefer when the MC is overpowered and just wipes everything without any problem it might be quite frustrating.
The third thing would be the MC being an idiot. He acts a bit naive in volume 1 and is quite confused about his situation in the beginning but, as mentioned before in this review, he is growing as the story goes on and takes more countermeasures against his enemies in case his first plan doesn’t work as expected. Many of the demons not being that smart is already clarified in the novel, they’re NPCs, and the type that would just be background characters, so aside from important ones like MC’s four subordinates, the other demons, although not being complete idiots or nothing like that, clearly don’t possess the same level of A.I. As MC’s subordinates.
Now regarding the whole thing about him letting his classmates level up, he can’t let his identity be discovered because if that happens it’s basically certain death for them all, so he needs to act as a normal classmate with them and not attract attention, which would certainly happen if he suddenly started to always try to stop them from leveling up, plus, he can’t always be with them anyways since if he neglects his subordinates in the demon side, their loyalty status might drop, which would make them not trust the MC anymore and they could even act violently against him, possibly trying to kill him too.