Yet LLMs can play chess and have a "mental" representation of the chessboard.

If LLMs get better but do not progress at playing games when not specifically trained on it it seems to point to a generalisation failure, a limitation that would prevent LLMs to ever achieve AGI, I do not know if that is weird but it seems that for now nobody really knows if they can achieve AGI or not. Perhaps some emergent behavior will arise after more scaling.

To me it's only totally unsurprising if you are 100% certain that LLMs will never reach AGI (like LeCun thinks for example).