Where is the logical mistake in the linked argument? If there is a mistake then I'd like to know what it is & the counter-example that invalidates the logical argument.
¹ Depending on context window implementation details, but that is the maximum, because the states n tokens back were computed from the n tokens before that. The minimum of course is an order n-1 Markov chain.
I would like to comment that there are a lot of papers out there on what transformers can or can't do that are misleading, often misunderstood, or abstract so far from transformers as implemented and used that they are pure theory.