Root cause analysis (RCA) in microservice systems requires distinguishing failure sources from routine fluctuations and propagated symptoms. Small language models (SLMs) offer a practical solution under cost and privacy constraints, and recent approaches improve their capabilities through structured diagnostic procedures. However, performing diagnostic analysis does not ensure correct root-cause identification. Our empirical study shows that final decisions often favor large anomaly scores despite the model's own propagation analysis suggesting otherwise. Moreover, the input does not reveal whether these apparently anomalous signals are common during normal operation. These findings motivate our system, which improves how SLMs assess evidence and select root causes through Historical Frequency Profiling and Biased-Decision Correction. Historical Frequency Profiling quantifies how often metric and log signals are flagged as anomalous in the fault-free period, providing context for distinguishing routine deviations from potential failure evidence. Biased-Decision Correction identifies points where the model reaches different conclusions from the same initial analysis and uses preference optimization to favor more accurate diagnoses. Against baselines including the 14B OpsAgent and RCA-Agent with commercial models, our system with a 4B model achieves the highest or tied-highest accuracy on all four datasets, reaching 48.7% on Bank compared with 18.5% for OpsAgent.

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