> Do they merely memorize training data and reread it out loud, or are they picking up the rules of English grammar and the syntax of C language?
This is a false dichotomy. Functionally the reality is in the middle. They "memorize" training data in the sense that the loss curve is fit to these points but at test time they are asked to interpolate (and extrapolate) to new points. How well they generalize depends on how well an interpolation between training points works. If it reliably works then you could say that interpolation is a good approximation of some grammar rule, say. It's all about the data.
This is a false dichotomy. Functionally the reality is in the middle. They "memorize" training data in the sense that the loss curve is fit to these points but at test time they are asked to interpolate (and extrapolate) to new points. How well they generalize depends on how well an interpolation between training points works. If it reliably works then you could say that interpolation is a good approximation of some grammar rule, say. It's all about the data.