Theory of Mind (ToM) capabilities in LLMs have recently become a central object of investigation, sparking debates and discussions. In this position paper, we explore many lines of work in different communities in AI and cognitive science. Inspired by cognitive work, we view ToM tasks as a two-step process: (I) first, determining whether and how to invoke ToM, which includes setting the appropriate Depth of Mentalizing (DoM); and (II) second, applying correct inference given the appropriate DoM. We identify that many works about ToM in LLMs, such as benchmarks and add-on modules, tend to unjustly overlook the first step and focus exclusively on the second one, which can be framed as a logic-reasoning task. We support our distinction with empirical evidence about the difficulty of the different steps in existing benchmarks. We conclude with suggestions for improved evaluation of ToM capabilities, inspired by dynamic environments used in cognitive tasks in biological agents.