This perspective is a fundamental misunderstanding of what LLMs are.
On the contrary, it's the result of careful consideration of how LLMs operate and reflection on the observed results.
The point of the technology is generalization, the ability to apply learned concepts. It isn't about cutting and pasting snippets of text from a dataset.
I didn't say that it's merely cutting and pasting snippets. As I mentioned, the model has the capability to use learned language to combine the multiple found snippets into a single coherent discourse. But their discourse *is* essentially a regurgitation of the many items of content retrieved from the prompt; some as text snippets, and others as more complex patterns learned directly from their training corpus.
But if you think that the model creates knowledge beyond what's provided in the training data, you're the one with a fundamental misunderstanding. What you call "generalization" is a codified compression of the trained corpus; that compression happens to capture patterns in the input documents at multiple levels - some at a surface syntax level, others connected to more abstract concepts that humans used to create and classify the content (such as style, emotion, and the meaning of the topics themselves).
When you apply those compressed patterns to new content, such as an input prompt, it activates the most relevant of those patterns, and generates the content most likely to match the multiple levels of activated patterns in the context of the current generation point. But the models in their current form have no capability at all to create new patterns at runtime based on their applied use, i.e. no memory and no method to reason about what they see.
So you're be mistaken if you think they have any capability to learn from content that was not part of their training data; they need to be retrained with more unit data in order to acquire such new content. Maybe in the near future there'll be a way to have models with actual online learning that get new knowledge directly from their own interactions, like they do now offline with RLHF.