In the same way a rocket flight model is forecasting the arrangement of air molecules it’s about to run into. They’re instantaneous forecasts that are dynamically updated. No long-term forecasting involved.
At the end of the day, options market makers haven’t blown up since the early noughties. (LTCM got sunk by non-options bets.) They are low-margin, low-risk businesses. It’s fun to talk about them like they’re black boxes. And traders trying to defend their compensation will keep pitching them that way to senior management. But options pricing is a boring, largely solved—if still interesting—problem.
Since the model to convert parameters to prices and quantities would be known in advance to all traders, the next step could be providing a feed of current parameters which traders could use to build their own view of the public book. They'd still need plenty of quotes published piecemeal as now (as not all quotes would be model-generated) but the messaging could be much more efficient, and that could lead to more options trading.
No market works like this. The smaller-still message of a price is sent and disseminated. When you buy a flight, you want the price of the ticket—not the airline’s fuel and tariff costs.
Btw when interest rates went negative for the first time, many trading shops were caught pants down, because of course their models did not have a provision for negative interest rates.