The word selections (both the larger word at the bottom, and the smaller words up top) are all from the secondary "Safe" wordlist.
This is the wordlist that the Scrabble AI plays with, to ensure it doesn't stick bad words all over the place, and only plays sensible words.
As such, the game could probably have done with a little more randomisation.
The smaller "Safe" wordlist is so much smaller that the "Target" words are incredibly similar, especially if you play on 4-letter mode.