Alfred North Whitehead talks about the notion of "Importance" as fundamental to the human (and all other living things) way of being. Living creatures first and foremost select information that is important to them from the broader environment, and then make decisions and take actions. (Of course at a physiological level it's much more complicated than this, but it's a sound philosophical description of how living things work.) LLMs lack this entirely. They have no selective filter because they weren't designed to have one (interesting question if you could even do that) and they're not evolved beings with a survival imperative. When they enter a self-conscious or other-conscious mode like you're describing, they just emit text that looks like the thoughts of a self-or-other-conscious person. They can't direct a stream of attention or hold a concept in the forefront relative to other concepts or (to your main point) think about what matters to the other person/being because they don't experience "matters." All they can do is emulate the verbal output of beings that actually experience these things, and given that I don't find it surprising they get trapped in loops over trivial things.