The "dumb" part comes from how it behaves in contexts where it lacks a lot of data, or where the data is skewed. Since they are tuned to give a prediction anyway and just make something up since sometimes those made up things are useful they will produce dumb results.

So people call them dumb since like dumb people they make strong statements about things they don't understand. And it doesn't matter how much smart things you encode them with, they will keep making strong statements about things they don't understand until they are fundamentally changed.

But since LLM are very smart about things where they have extensive data they can still be used to reliable solve many problems and probably in the future where we understand that better almost completely replace most lawyer and doctors work etc, because a lot of what a frontline doctor or basis lawyer work is very repetitive and can be encoded with billions of examples and decision paths into an expert system framework the LLM will follow.

So people say LLM are dumb since LLM will always keep making dumb statements. This is the same way we call Elon Musk dumb for making a lot of dumb statements, he is a smart guy but he makes dumb statements so her is dumb.