I don't know how LG TVs do it, but e.g. many smartphones use a dedicated ASIC/audio processing chip that does not really record anything, but specifically listens for the wake word and discards all other audio to save power/battery life. I think this distinction is relevant, because there is a huge privacy difference between streaming a live audio stream to the cloud to detect a wake word and a specialized audio processor that has a small buffer only for detecting the wake word, where the audio does not leave that processor.

Theoretically, you could call that few-second buffer recording, but I don't think that would be collecting/recording ambient conversations to most people, since it's ephemeral and does not leave your device.

The question, of course, is what happens in LG TVs.