> "...the agent could be called self-aware."
"Could be called" being the key phrase. Yes, you can call such a model self-aware, because indeed it incorporates a model of itself so it is self-aware in a very literal sense.
However, there's no reason to believe that a model with the ability to represent itself would have conscious experience of the kind humans do. Why should we expect it to be any different from any other ML model or computer program, just mechanically executing its program without any conscious experience? What stops it from being, basically, a machine version of a philosophical zombie?
This is the hard problem of consciousness in a nutshell, and the Schmidhuber comment doesn't address it in any meaningful way.
Your link is quite technical.
edit: Out of curiosity, why would one consider him infamous?
Perhaps look up the case with Ian Goodfellow's work on GANs. Schmidhuber said the GAN paper doesn't give sufficient credit to his earlier work on predictability minimization and was very vocal about this also in conferences (interjecting etc.).
IIRC claims were made that LeCun etc. were unfairly credited for work pioneered by him. As in, he pretty much invented modern ML but wasn't credited at all.
https://www.reddit.com/r/MachineLearning/comments/2xcyrl/i_a...