AGI is when it can do all intellectual work that can be done by humans. It can improve its own intelligence and create a feedback loop because it is as smart as the humans who created it.
When you have a single model that can do all you require, you are looking at something that can run billions of copies of itself and cause an intelligence explosion or an apocalypse.
It is also a line of thinking that will bite us in the ass if humans aren't as general of thinkers as we make ourselves out to be.
It feels like an arbitrary bar to perhaps make sure we aren't putting AIs over humans, which they are most certainly in the superhuman category on a rapidly growing number of tasks.