I'm not convinced by this explanation. Small language models (similar in size to the Stable Diffusion network) don't just produce incorrect statements like "cats are an animal with four tails", they produce incoherent sentences with no relation to the text they are supposed to extrapolate. It's not that they are wrong, they don't even make sense much of the time. That's not true for SD. Yes, many of its output images have flaws, but the overall image usually shows the desired subject, and roughly resembles something a human artist might paint.