I feeling I get from this is that this could be the mental model for a robot in the real world, continuously corrected by actual events.
We all have a world model in our heads of what we think is going to happen, we adjust quickly (or not) based on what does. This is pretty incredible stuff.
And why not? Because the first model that can actually learn to handle the simulation not only can do the simulation internally too, but it can do it better than out simulation.
It's where (ex-)"AI luminaries" go to die. It's a way to make glacial, slow progress in the correct direction while never actually getting anywhere.
So we get to a point and people keep making complicated simulations of one kind or another ... and then someone (some model) who's never used the simulation, and doesn't need it for model training gets by far the highest score on every benchmark and everyone agrees the simulation was kind of beside the point.