I can't give you or your sibling a better answer than "you'll know it when you see it". Some people see it now. I think they're wrong, because it seems like the results you're describing are easily explained by fuzzy search in the space of embeddings and then forming strings of plausible tokens related to the resulting region of embeddings space. In other words, the things we know LLMs actually do.

That's more or less looking for interesting patterns in a jpeg or another lossy compression result. It's interesting that the models seem to be able to (fairly) reliably return relevant chunks of the image. Even more interestingly, they seem to be able to invent plausible chunks of image that aren't even there. That doesn't meet my bar for intelligence though. I'd need to see it learn and adapt. I'd need to see it be clever, not merely "knowledgeable". I'd need to see it capably analyze itself. I'd need to see it reasonably estimate uncertainty and know itself in the sense that it has some idea how right or wrong it is about something. I'd need to see it exercise judgment.

I don't think I'd give a different answer a decade ago but who knows.

[edit] For all we know, one of the salient features of intelligence is that intelligent beings are incapable of precisely defining it. I'm not sure how productive it is to attempt to do so.