It's not counting, it's just outputting something that is likely to sound right. The reason it can't count is that it doesn't know that it should run a counting algorithm when you ask it to count, or what a counting algorithm is. There is no reason why an AI should not be able to run an algorithm. Coming up with appropriate algorithms and running them is one definition of AIs. This is not an AI. It is an algorithm itself but it cannot create or run algorithms, though it can output things that look like them. The "algorithms" it outputs are not even wrong, correctness and truth is orthogonal to it's output and without that you don't have real intelligence.