Earlier quoted context omitted.
They are definitely not Markov Chains they may, however, be Markov Models . There's a difference between MC and MM.
What do you mean? The states are fully observable (current array of tokens), and using an LLM we calculate the probabilities of moving between them. What is not MC about this?
MC have constant and finite context length, their state is the most recent k tuple of emitted alphabets and transition probabilities are invariant (to time and tokens emitted)