You are anyway, I don't see anyone up the chain saying that.
And context window work very well. You can 'teach' an llm a new programming lanuage and other things through it.
The problem is real but I don't think positing a philosophical root is helpful
If "agency" is making decisions and performing corresponding actions in the real world, then LLMs most definitely LOOK LIKE they're making decisions (what's the next token? which tool to use? what's to say, in general? what idea to convey?) and performing actions (tool use). Can we tell whether they are ACTUALLY making decisions? Well, are the people around me "actually" making decisions? Or are they simply pushed around by circumstances and external forces?
Am I actually making decisions? Did I like DECIDE to write this comment? Maybe? I have no clue...
It's quite simple, the agency that the LLM appears to have is actually your own. Without a prompt an LLM does nothing. It has no thoughts between prompts about you or your problems.
So when it's not active, not responding to a prompt, it's of course not thinking. I'm pretty sure nobody actually questions this. Is your computer "thinking" when it's powered off? Can a piece of metal think? Probably not. So there are no thoughts between prompts, this seems obvious.
Thus, this is a question of "discrete time vs continuous time". LLMs "live" from prompt to prompt. Humans are alive continuously. In some sense, we're prompted by a lot of things all the time. As I'm writing this, I'm seeing stuff, I'm hearing stuff, I can feel various parts of my body, I'm thinking about my problems, my goals, other people's problems and goals, etc. When I'm in a sensory deprivation tank, my brain keeps "entertaining" me by "self-prompting", like a recurrent neural network (I guess it literally is a massive RNN).
So it seems like your definition of "thinking" hinges upon the LLMs being discrete-time and single-threaded (can't think about multiple things in parallel).
IMO a more interesting question is whether an LLM is thinking WHILE IT'S GENERATING A RESPONSE, while it's "alive".
Twice in your comment you suggest things that you think that I believe, please do not do this.