Nod. Words are understood by humans, in the context of our lived experience. Our whole 3d understanding of the world, physics, chemistry, math all contribute to the mental scene we create. LLMs are trained on the data we create. When a human creates a work of text it can indicate understanding.
When the radio transmits human words, it does indicate the radio understands. Wikipedia does not understand. #Wikipedians understand. When an LLM summarizes a Wikipedia article it demonstrates how well those Wikipedians understood the topic(s).