A typical autoregressive transformer model operates on a fixed-size context that acts as both input and a queue to which the output of the model is appended. If a model operates on a context of length k with n possible symbols in its alphabet, then there are n^k possible contexts.
If you run such a model for n^k iterations, then
1) if the <eos> (end of sequence) symbol appears in the context, then the model halts.
2) if the <eos> symbol never appears in the context, then you know the model never halts because it must repeat a context string by the pigeon hole principal and must be in an infinite loop.
Therefore, the halting problem is decidable for transformer models with finite length contexts that are autoregressive in this way and that would imply a contradiction if we claim they are Turing complete (because the halting problem is known to be undecidable for Turing complete systems).
I'm not entirely sure this proves anything (it sounds believable I guess?), but at least I think it describes the argument they are making.
It is sort of interesting how it highlights the different between a system that can write to any position in memory vs. one that can only append to memory while being required to delete the first memory cell (where memory is a queue).
However, the overall paper is awful and pretty hard to take seriously.