Yes it seems that is the crux of the embodiment section in the article. That whether physical or virtual, the "AI" needs minimally: persistence in its environment, sensory signals of that environment, and some feedback loop of continuing to try to exist in that environment; having a subjective experience.

And that that is the baseline before we can really even consider that it has consciousness of its own subjective experience, versus being a worm that happens to output text as its digestion process.

And then the further question only after that is established, is what are its needs? What moral patienthood do we have to acknowledge in terms of meeting those needs? And finally, with all the other prerequisites checked, what is the AI's moral agency in what it chooses to do.