It appears that New Quiz, Fill-in-the-Blank default condition gives the correct answer after the student puts in a wrong answer. If "Allow Multiple Attempts" is checked, then students learn to just put in a dummy answer, see the correct answer, then use that in the next attempt.
I now know to switch off "Show Correct Answer" in New Quiz Settings.
However, shouldn't Canvas be giving us a warning when we have those two conditions together: "Show Correct Answer" and "Allow Multiple Attempts"?