This is because of the nature of what it's doing. It's still just predicting tokens behind the scenes; it's just treating the entire conversation between you and it as one long chunk of text for which it must predict the text to come. But the model has no way of keeping track of who said what, and it's not really conversing with you the way you are with it. So screwups like confusing "my" for "your" are to be expected.
Much of the transformative power of LLMs has come from dumb logic wrapped around them that either changes what is fed to them ("memories", "thinking/reasoning", etc.) or how their output is interpreted/acted upon (agent harnesses, loops, etc.). For this reason, Anthropic could release "Claude Necronomicon" tomorrow and tell us it could hack the planet and gain control of the world's nukes, dooming us all, but until it's actually hooked up to something that enables the execution of those commands, it can't do squat. Of course, that's no reason not to worry since some idiot is likely to build that torment nexus (and they may well work for Anthropic), but at the end of the day the thing is still just predicting tokens and everything else it seems to be doing is being faked with clever massaging of the input or output.
