(Of course, maybe you could argue that's a famous example in its training set and it's just regurgitating, but then you could try making modifications, asking other questions, etc, and the LLM would continue to respond sensibly. So to me it seems to understand...)
Or going back to the original Hofstadter article, "simple tests show that [machine translation is] a long way from real understanding"; I tried rerunning the first two of these simple tests today w/ Claude 3.5 Sonnet (new), and it absolutely nails them. So it seems to understand the text quite well.
Regarding computation and understanding: I just though it was interesting that you presented a true fact about the computational limitations of NNs, which could easily/naturally/temptingingly -- yet incorrectly (I think!) -- be extended into a statement about the limitations of understanding of NNs (whatever understanding means -- no technical definition that I know of, but still, it does mean something, right?).