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Because it's an regurgitation algorithm which is capable of multiple levels of abstractions.

It understands nothing. It cannot do reasoning.

It's possible it might develop a reasoning "part" if the parameters and training are specified in a certain way, but even then it will be up to chance if it develops a sub-part of it's abstraction mechanism that will actually be able to do pure logic without just guessing smartly what should come next.

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It understands to certain extent . I made it realize (asked if 4>3) it’s mistake and it’s response now:- “I apologize, my previous response was incorrect. The else block in the Java program you provided will not execute because the condition z > y is true, resulting in the execution of the code inside the if block, which sets x = 2 and prints 2. The else block will not be executed.”

No, it didn't recognize or fix its error. It simply added your statement to the "body of truth" and then wrote a new answer which includes what you said and explains it based on the previous content of the thread.

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