The very fact that it is able to search within a meaning-space demonstrates that it understands semantics, to some extent. Philosophically, that is profound, for something that is just one big matrix multiplication. Drawing connections between things in meaning-space is surely a facet of intelligence.
It’s not intelligence if you are the one who gives the correlations to the model in the pre-training. It’s Word2Vec, applied. Model doesn’t learn anything. You embed these correlations and build it from there. It just searches the space.
As my AI professor said in the first lecture: “All AI is advanced search”.