It's ability to simulate physics intact is actually a huge breakthrough. I can't even fathom what it would be like for the future of simulation and physical world when it gets far more accurate and realistic.
Ironically the physics are kind of my biggest criticism. They call these "world models", but I think it's more accurate to call them "video game models" because they employ "video game physics" rather than real world physics, among other things This is most evident in the way things collide.
If there is a possibility where it continue to improve at a similar rate with llms. A way to simulate fluid dynamics or structural dynamics with reasonable accuracy and speed can unlock much faster pace of innovation in the physical world. (And validated with rigorous scientific methods)