Even though I think it's true that it's lossy, I think there is more going on in an LLM neural net. Namely that when it uses tokens to produce output, you essentially split the text into millions or billions of chunks, each with probability of those chunks. So in essence the LLM can do a form of pattern recognition where the patterns are the chunks and it also enables basic operations on those chunks.

That's why I think you can work iteratively on code and change parts of the code while keeping others, because the code gets chunked and "probabilitized'. It can also do semantic processing and understanding where it can apply knowledge about one topic (like 'swimming') to another topic (like a 'swimming spaceship', it then generates text about what a swimming spaceship would be which is not in the dataset). It chunks it into patterns of probability and then combines them based on probability. I do think this is a lossy process though which sucks.