If you ask me to solve increasingly dififcult Tower of Hanoi problems, I don't expect to be good at it. Neither would I expect a fellow human to be. So based on this should we question our intelligence?
I heard about that paper through an "AI explained" video [0], so I might be biased, but I agree with that video that the Apple paper is "meh" at best: it points out LLM limitations that are hardly a surprise.