You can reconcile these points by considering what specific context is necessary. The author specifies "outside" context, and I would agree. The human context that's necessary for useful summaries is a model of semantic or "actual" relationships between concepts, while the LLM context is a model of a single kind of fuzzy relationship between concepts.
In other words the LLM does not contain the knowledge of what the words represent.
> In other words the LLM does not contain the knowledge of what the words represent.
This is probably true for some words and concepts but not others. I think we find that llms make inhuman mistakes only because they don't have the embodied senses and inductive biases that are at the root of human language formation.
If this hypothesis is correct, it suggests that we might be able to train a more complete machine intelligence by having them participate in a physics simulation as one part of the training. I.e have a multimodal ai play some kind of blockworld game. I bet if the ai is endowed with just sight and sound, it might be enough to capture many relevant relationships.
In other words the LLM does not contain the knowledge of what the words represent.