Yes, neurones do not understand "pen" -- but some highly particular whole bodies do (ie., english spekaing people). That's because of highly particular relationships between those neurones, the body, the environment, and the history of that language user.
This is the csci brain rot that searle is baffled by. Symbol manipulation implies no relationships between wholes and parts. The capcity to understanding meaning requires extraordinarily specific ones.
Saying, "if you can't point to the neuron that does X, then you can't prove X happens" isn't a scientific perspective. It's a willfully ignorant one. If you're confident in the scientific process, then we will eventually understand how all kinds of human mental processes make sense in the context of neural networks.
>It does not take place in an LLM.
I don't know what else to tell you but LLMs absolutely model concepts and the physical world, separate from the words that describe them. This has been demonstrated several times.
Alright, so what neuron in your brain "understands" English ?. Hell feel free to name any part regardless. This is why the Chinese Room is nonsensical. Either you admit the system can understand even when none of the constituents do or you admit you don't understand anything at all either. At least either conclusion would be consistent.
Unfortunately, we have many people take the nonsensical middle road. "Oh that doesn't understand but I certainly do, just because."