We got pretty far with this a few years ago using more basic ML/NLP. The app was called Moatboat: https://twitter.com/moatboat/status/1082425681210859520
The area I think is most exciting (and in need of more innovation) is using natural language to create (and modify!) the actual simulation / rules / behaviors. Our approach was to map language outputs to actions that could be chained together using Goal Oriented Action Planning plus an Entity Component System. The user's verbs / prepositions / etc. would add layers of goals, each of which would enable or disable certain behavior components when triggered.
More details here for anyone interested: https://medium.com/@mikejohnstn/whatever-you-say-happens-2fa...
Directly generating source code from natural language would be a fun alternative approach to try today.