"The latter." It...is pretty obvious that it's the latter, considering that the carnival is still frozen and everything's still cold, but Strange is specifying anyway.

"It didn't even tell me that I summoned the wrong faerie--which is to be expected, I suppose, but my point still stands." Faeries were always supposed to be capricious, fickle, and self-serving and really, this just 100% helps further confirm Strange's opinions of them. At least he'll be better prepared the next time he summons one.