You apply a reductionist view to LLMs that you do not apply to humans.
LLMs receive words and produce the next word. Humans receive stimulus from their senses and produce muscle movements.
LLMs are in their infancy, but I'm not convinced their "core loop", so to speak, is any more basic than our own.
In the world of text: text in -> word out
In the physical word: sense stimulation in -> muscle movement out
There's nothing more to it than that, right?
Well, actually there is more to it than that, we have to look at these things on a higher level. If we believe that humans are more than sense stimulation and muscle movements, then we should also be willing to believe that LLMs are more than just a loop producing one word at a time. We need to assess both at the same level of abstraction.