The LLM teaches itself the rules of the simulation by learning to predict what happens next so well.
Presumable, running a human simulation by brute forcing physics at a scale large enough to represent a human is completely infeasible, but we can maybe conceive how it would work. LLMs are an impressive engine for predicting “next” that is actually computationally feasible.
Better just code up your simulator to run efficiently on a supercomputer!