Yes, it looks like you are mis-interpreting.

If $set is given, it must be an array ref of characters to use

so this argument contains the list of chars to use, as opposed to not using. Perhaps you want:

$Password=chars(5,8,\('a'..'z'));
[download]

which should create a password between 5 and 8 chars in length, containing only lowercase chars from 'a' to 'z'.
Hope this helps
--
bm