This to me is the paradox of modern LLMs, in that it doesn't represent the underlying domain directly, but it can represent whatever information can be presented in text. So it does represent _some_ information but it is not always clear what it is or how.
The embedding space can represent relationships between words, sentences and paragraphs, and since those things can encode information about the underlying domain, you can query those relationships with text and get reasonable responses. The problem is it's not always clear what is being represented in those relationships as text is a messy encoding scheme.
But another weakness is that as you say it is generative, and in order to make it generative we are instead of hardcoding in a database all possible questions and all possible answers, we offload some of the data to an algorithm (next token prediction) in order to get the possibility of an imprecise probabilistic question/prompt (which is useful because then you can ask anything).
But the problem is no single algorithm can ever encode all possible answers to all possible questions in a domain accurate way and so you lose some precision in the information. Or at least this is how I see LLMs atm.