The conditions for passing the test are set in the "Test - Settings" modal: pause between attempts, number of attempts, points, and display of correct answers to the student.
To set up quiz conditions, open a course, select a lesson, and go to the Homework tab. Next to the "Question" section, click the gear icon (or one of the indicators: "Questions / Max. Points / Passing Score"). Set the interval between quiz retakes in days and the number of attempts, the points for each answer, and the passing score (fixed or based on attempts). If necessary, enable the display of correct answers after the quiz. Save.
To ensure that the test participates in course transition blocking, set up a stop lesson - see How do I set up a stop lesson?