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The keyword here isn't "understand". It's "novel". You "truly understand" a thing if your model of it lets you make sense of every possible instance of the thing, including those that are very far from what you've seen before (extreme generalization). You "somewhat understand" the thing if you can approach at least some new instances of it (local generalization). If you can only handle what you have seen before, you are merely memorizing / retrieving. <a target="_blank" href="https://twitter.com/fchollet/status/1965551724653109514" color="blue">x.com/fchollet/statu…</a>
"Understanding" isn't some magical, ineffable concept. It's a very concrete and practical property of an agent, reflected in what it can *do*. We know LLMs don't "truly understand" because we can see what they can't do. It's as simple as that.