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They generate text which looks like the kind of text that people who do have understanding generate.
Two key things here to realize. People also often don't understand things and have trouble separating fact from fiction. By logic only one religion or no religion is true. Consequently also by logic most religions in the world where their followers believe the religion to be true are hallucinating. The second thing to realize that your argument doesn't really apply. Its in theory possible to create a stochastic parro…
That's not the point being argued. Understanding, critical thinking, knowledge, common sense, etc. all these things exist on a spectrum - both in principle and certainly in humans. In fact, in any particular human there are different levels of competence across these dimensions.
What we are debating, is whether or not, an LLM can have understanding itself. One test is: can an LLM understand understanding? The human mind has come to the remarkable understanding that understanding itself is provisional and incomplete.