Indeed. Although more recently they figured out a way to feed the hidden state as the new input, which basically allows the model to "continue thinking" in vect

Indeed. Although more recently they figured out a way to feed the hidden state as the new input, which basically allows the model to "continue thinking" in vectors without round-tripping it via words (or pixels). Presumably if you were to take that and build a large enough NN to accommodate all the necessary state it needs to carry and all the rules it needs to be able to execute, then after training it on enough game input you'd have a proper world simulation. Of course, as the article rightly notes, then you have just successfully reimplemented Minecraft in a way that is orders of magnitude more computationally expensive...