And, not to insult you, but it's quite obviously wrong. As a mental model it fails to explain basic capabilities. How can an LLM follow elaborate instructions? How can it respond appropriately to user input, when the user input doesn't match any previously seen text? Hell - how does it even balance parentheses? There is no way to explain any of this without conceding that the LLM has semantic understanding. It knows that this comes after that, but "this" and "that" can be at an arbitrary level of abstraction.
Sure - they generate text "like" text they've seen before. That "like" does a ton of heavy lifting.