Humans perceive phenomena via senses, and then carve categories or concepts to understand them. This is a process of abstraction and each idea has an associated qualia. Then use language to describe these concepts. As such, a concept is grounded either by actual phenomena or operations, or is a composition of other grounded concepts. The creation of categories and grounding them involves constant feedback from the environment - and is a creative process, and we as agents have "skin in the game", in the sense that we get the rewards/punishments for our understanding and actions.

Map vs Territory is a common analogy. Maps describe territories but in an abstract and lossy manner.

But, most of us dont construct grounded concepts in our understanding. We carry a muddle of ungrounded ideas - some told to us by others, and some we intuit directly. There is a long tradition of attempting to think clearly all the way from Socrates, Descartes, Feynman etc.. where an attempt is made to ground the ideas we have. Try explaining your ideas to others, and soon, you will hit the illusion of explanatory depth.

LLM is a map and is a useful tool, but it doesnt interact with the territory, and it does not have skin in the game, and as a result, it cant carve new categories in a learning process that we have as humans.