The internal model of a CPU is linear and fixed. Yet, a CPU can still generate an output which is very different from the input. It is not a simple lookup table, instead it executes complex algorithms.
An LLM has large amounts of input processing power. It has a large internal state. It executes "cycle by cycle", processing the inputs and internal state to generate output data and a new internal state.
So why shouldn't LLMs be capable of executing complex algorithms?