Do they? Interpretability techniques like the Logit Lens [1] wouldn't work if this were the case. That author found that at least for GPT-2, the network almost immediately transforms its hidden state into a "logitable" form: you can unproject the hidden state of any layer to see how that layer incrementally refines the next token prediction.
[1]: https://www.lesswrong.com/posts/AcKRB8wDpdaN6v6ru/interpreti...
> We use a pre-trained GPT-2 (Radford et al., 2019) as the base model for all experiments. The learning rate is set to 1 × 10−4 while the effective batch size is 128. Following Deng et al. (2024), we also reset the optimizer when the training stages switch.
Like in a CNN for instance, if you fed later representations back in to the first kernels they wouldn't be able to find anything meaningful because it's not the image anymore, it's some latent representation of the image that the early kernels aren't trained on.
Basically, the lm_head (a MxN matrix where M is the dictionary size and N is the internal dimension) can be seen as the dictionary too. You can think that and the softmax over it as compute cosine similarity of the last hidden output w.r.t. input embedding dictionary.
In that sense, they are sharing the representation space.
(BTW, I believe sharing lm_head with input embedding not working as good as separating them, so only mobile focused LLMs do so. So here is that. It would be interesting to experiment if injecting a projection layer like you suggested would improve performance or just red-herring).