For example, HTML isn't divided into numbereres pages while PDFs are. A lot of latex interacts with page boundaries. Figures tend towards the tops of pages. And there's \clearpage. And the reference list might say which page each citation appeared on. All that stuff needs someone to decide how to handle it and then to implement that handling. Like... what value does \pageheight return? Sometimes I resize things to fit the page height, and if it was doubled then I should have resized to fit the width instead.
As a glimpse into the very tip of the iceberg, this diagram is https://tex.stackexchange.com/a/158740/ generated with 100% Latex code.
Also, a bug in a converter is conceptually much easier to fix than to re-train your LLM.
I am not sure that AI in it's current state is useful when "high fidelity" is required.
We have a plan in place to meaningfully fall back for unknown packages, but that will take at least another year to put in place, and likely another couple of years to stabilize.
Meanwhile, there is some hope that with arXiv launching the HTML Beta we will get more contributions for package support (LaTeXML is an open source project, with public domain licensing, everybody benefits).
But again the original point is spot on. Coverage will be hit-or-miss for a while longer yet, for an arbitrary arXiv submission. The good news is that authors could work towards better support for their articles, if they wanted to.
It's nontrivial to export this to HTML in all cases, and even then, nobody is asking for HTML from us even though we all want it. I'm guessing Arxiv is using some kind of converter which _usually_ but not _always_ works.
That said, this is a long time coming and PDF as the standard should've died a decade ago. I wish I had this when I was in my PhD program.