I think there is something (a lot) to this. Consider how much of our learning is experiential, and would be hard to put into a purely abstract symbol manipulating system. Taking "falling down" for example. We (past a certain age) know what it means to "fall", because we have fallen. We understand the idea of slipping, losing your balance, stumbling, and falling due to the pull of gravity. We know it hurts (at least potentially), we know that skinned elbows, knees, palms, etc. are a likely consequence, etc. And that experiential learning informs our use of the term "fall" in metaphors and analogies we use in other domains ("the market fell 200 points today, on news from China...") and so on.

This is one reason I like to make a distinction between "human level" intelligence and "human like" intelligence. Human level intelligence is, to my way of thinking, easier to achieve, and has arguably already been achieved depending on how you define intelligence. But human like intelligence, that features that understanding of the natural world, some of what we call "common sense", etc., seems like it would be very hard to achieve without an intelligence that experiences the world like we do.

Anyway, I'm probably way off on a tangent here, since I'm really talking about embodiment, which is related to, but not exact the same as, situated-ness. But that quote reminded me of this line of thinking for whatever reason.