This just hit me but humans do not have a good understanding of physics; or maybe most of humans have no understanding of physics. We just observe and recognize whether it's familiar or not.
AI will need to be, that being the case, way more powerful than a human mind. Maybe orders of magnitude more "neural networks" than a human brain has.
I was watching my child in the bath the other day, they were having the most incredible time splashing, feeling the water, throwing balls up and down, and yes, they have absolutely no knowledge of "physics" yet navigating and interacting with it as if it was the best thing they've ever done. Not even 12 months old yet.
It was all just happening on feel and yeah, I doubt they could describe how to generate a movie.
You only need to see a ball bounce once and your brain has done some rough approximations of it's properties and will calc both where it's going and how to get your gangly menagerie pivots, levers, meat servos and sockets to intercept them at just the right time.
Think also about how well people can come to understand the physics of cars and bikes in motorsport and the like. The internal model of a cars suspension in operation is non-trivial but people can put it in their head.
I know I can't put my hand through solid objects. I know that if I drop my laptop from chest height it will likely break it, the display will crack or shatter, the case will get a dent. If it hits my foot it will hurt. Depending on the angle it may break a bone. It may even draw blood. All of that is from my intuitive knowledge of physics. No book smarts needed.
Maybe I'm missing the big picture here, but the above and all the weird spatial errors, like miniaturization of people make me think you're wrong.
Clearly the model is an achievement and doing something interesting to produce these videos, and they are pretty cool, but understanding physics seems like quite a stretch?
I also don't really get the excitement about the girl on the train in Tokyo:
In the Tokyo one, the model is smart enough to figure out that on a train, the reflection would be of a passenger, and the passenger has Asian traits since this is Tokyo
I don't know a lot about how this model works personally, but I'm guessing in the training data the vast majority of people riding trains in Tokyo featured asian people in them, assuming this model works on statistics like all of the other models I've seen recently from Open AI, then why is it interesting the girl in the reflection was Asian? Did you not expect that?