Can someone explain in a bit more simple terms the answer for this question (image attachment)?

I can't follow how the track error is 4 degrees when the outbound track is 005 and the OBS is set to 006, plus a 2 dot indication left, to me that is 5 degrees being that your FPT = 005, you're 4 degrees right of the 006 radial (TMG = 010, FPT = 005, TE = 5 degrees right).

If like in the answer you set 005 on your OBS, then the CDI would be at 2.5 dots to the left.

I think that in the question there might be a mix up with the answer?

It looks like there's a typo in the stem of that question (The explained answer is correct though). It should read "Your VOR [tuned to Parkes] has 005 set on the OBS". Thanks for pointing that out. The question will be amended accordingly.

On above question, are we 4 degrees right of the FPT or 6 degrees?

My calculation is:

2 dots to the left is 6 degrees considering the first dot is 4 degrees (2 degrees is the edge of the centre circle)
So when VOR set to 005, we are 6 degrees to the right of the FPT, which makes our closing angle to Dubbo is also 6 degrees.
Based on that we are on 179 radial of Dubbo, with heading of 010 (adf is 11 degrees to the left)
So my answer is 349R

Am I missing something?

In the jargon of the average pilot the edge of the centre circle is usually counted as the first 'dot' and it represents 2°. So two dots left would normally be taken as the first dot after the circle i.e. 4°. The examiner is aware of this as a possible source of confusion and he has indicated to me that he will use the phase "one dot left of the centre circle" to remove any doubt.