Our cortex is connected in a loop with our thalamus (cf recent talk of looped transformers!), which can be separated into thalamic core and matrix. Basically our senses feed into the thalamic core, and cortical outputs (predictions) feed into the thalamic matrix. The thalamic connections/loop seem to act a bit like a patch panel connecting different regions of the cortex.
The cortical microcircuit is a real physical circuit - a pattern of synaptic connections between layers and inputs/outputs. Those Transformer circuits are more functional than physical. We know how a Transformer is physically connected, with attention heads etc, and this "circuit" analysis then describes how it functions, e.g. with attention heads in adjacent transformer layers effectively combining to form "induction heads" that copy data across embeddings.