They are just token generators. It is just that 'just' does a lot of lifting!

Here's the thing: most things people do does not involve tokens of any kind. It is, in fact, stuff that not easily describable. For example, it's trivial for a person to walk, but they cannot verbally describe what muscles they're activating in what order to make that happen.

Cognitive skills such as tool use and complex navigation predate language as well. That means there's a core of reasoning in humans that doesn't depend on "tokens" or "language" of any kind. Language is a tool for communication and forming complex human societies, but it's not cognition.

> The thing is a parrot just says things it has already heard, it doesn't perform complex reasoning on novel situations and then explain it succinctly.

Well a parrot does perform complex reasoning on novel situations all the time. It just doesn't have the wiring to connect that to "tokenized" human language. I suspect LLMs have the opposite problem, where they exist in the domain of their "tokens" and have no way to connect these to truly novel situations that have no existing words to describe them.