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I've heard expers say that GPT4 displays signs of general intelligence so while I still wouldn't call it an AGI I'm in no way claiming an LLM couldn't ever become generally intelligent. Infact if I were to bet money on it I think there's a good chance that this is where our first true AGI systems will originate from. We're just not there yet.
It isn't. It doesn't understand things like we think of with intelligence. It generates output that fits a recognized input. If it doesn't recognize the input in some form it generates garbage. It doesn't understand context and it doesn't try to generalize knowledge to apply to different things.
For example, I could teach you about gravity, trees, and apples and ask you to draw a picture of an apple falling from a tree and you'd be able to create a convincing picture of what that would look like even without ever seeing it before. An LLM couldn't. It could create a picture of an apple falling from a tree based on other pictures of apples falling from trees, but not from just the knowledge of an apple, a tree, and gravity.