What do you mean with application and what do you mean with system?
Based on @Paul_Lamb’s answer (next quote), I’m not sure you’re talking about the same thing. Or I may be confused completely.
You see, in this analogy, wouldn’t the application be the dog instead of the dog show. The dog’s internal state could be “master wants me to return the ball” compared to “run around because I’m excited”. The judge needs to find out if the dog performs intelligently to award the points, and so needs to get an appreciation of the dog’s internal state.
To get back to the software application, if you want to devise an intelligent system, it needs to interpret its internal state, doesn’t it? And so probably also does the judge algorithm.