More like confused than wrong. :-:

The points always cover only the fare. In markets where there are high taxes/fees the cash component will be higher. That said, the point valuation is generally tied to the fare, not the all-in cost. So if the fare portion is ~$100 and you're paying 12,000 points that's not a great redemption versus some others we've seen, but it is based on the $100 number, not the $218 total.

And, FWIW, this is the same policy as all the other US carriers. None waive the taxes/fees when paying with points.