The error they mention is that Kyber has the security level of 2^41 bits, instead of 2^80 bits, but does that make any difference? Isnt 2^80 still not sufficient security level?
I don't see a mention of error with these specific numbers. The 2^80 value is only used in the introduction of the article linked. The actual problems in the NIST analysis are more complex, though similar in nature.
The security level also depends on how you measure it (number of ASIC gates, number of CPU operations), but later in the article values are 2^118 to 2^140 and higher, depending on model and analysis. We know that they are "close" to AES-128 security level, but due to "known unknowns" the estimates could easily be wrong by 2^10 = 1000 times.
What is the problem about, the general recommendation to use Kyber 512?
The author of that article feels that NIST is not fairly comparing the alternatives, particularly NTRU vs. Kyber.
The claim is that in fair analysis, NTRU-509 would be as secure as Kyber-512, while being faster and requiring less bytes for keys and ciphertexts. And NTRU-677 would be more secure than Kyber-512, while being slower and having larger signatures and ciphertexts.
NISTs evaluation omits NTRU-509 on the basis that it wouldn't have sufficient security level. After that, some hand-waving is done to explain how Kyber-512 does meet the security level needed, despite some analysis results to the contrary. Yet, had the same hand-waving been applied to NTRU-509, it would meet the security level also.