Indeed - there are, in fact, several things wrong with it. Firstly, it is a circular argument in which an unargued-for intuition - '"The system" isn't the kind

Indeed - there are, in fact, several things wrong with it. Firstly, it is a circular argument in which an unargued-for intuition - '"The system" isn't the kind of thing that understands' - is used in trying to justify that intuition. Secondly, no-one is suggesting, and Strong AI certainly does not imply, that the utterly simple 'system' here is capable of understanding anything. The fact that it does not proves nothing. Thirdly, it is irrelevant (a variant of the homunculus fallacy) to see any significance in what the actors understand and when they do so, as they are being employed to act as unthinking automata. Replace each of them with a simple mechanism for placing a letter in a predetermined spot, and you have an equivalent system, also mindless, that is equally useless for demonstrating anything about the feasibility of Strong AI.