peak watch compiles not as I had expected

[dingledow]

I thought that running peak watch would take the Jade file and compile to an index file with dummy data.

Example

// #(IndexPage)
        .col__4-12
          h1.index-page__title Blog
        .col__8-12.index-page
          // #(Posts)
          // #(Text)
          .text-post
            .post-title
              a(href="!(Permalink)").h1 !(Title)
            .post-date
              span !(DayOfMonth) !(Month) !(Year)
          // ##
          // ##
        // ##

compiles to:

{block:IndexPage}
        <div class="col__4-12">
          <h1 class="index-page__title">Blog</h1>
        </div>
        <div class="col__8-12 index-page">
          {block:Posts}
          {block:Text}
          <div class="text-post">
            <div class="post-title"><a href="{Permalink}" class="h1">{Title}</a></div>
            <div class="post-date"><span>{DayOfMonth} {Month} {Year}</span></div>
          </div>
          {/block:Text}
          {/block:Posts}

However, when I run it at localhost:1111 all the tags appear in the HTML. Does Peak not support rendering it as Tumblr would, or with dummy data?