I will add the totally inconsistent backgrounds in the "prototyping" example suggests the AI is simply cribbing from four different games with a flying avatar, which makes it kind of useless unless you're prototyping cynical AI slop. And what are we even doing here by calling this a "world model" if the details of the world can change on a whim? In my world model I can imagine a small dragon flying through my friend's living room without needing to turn her electric lights into sconces and fireplaces.
To state the obvious: if you train your model on thousands of hours of video games, you're also gonna get a bunch of stuff like "leaves are flat and don't bend" or "sometimes humans look like plastic" or "sometimes dragons clip through the scenery," which wouldn't fly in an actual world model. Just call it "video game world model!" Google is intentionally misusing a term which (although mysterious) has real meaning in cognitive science.
I am sure Genie 2 took an awful lot of work and technical expertise. But this advertisement isn't just unscientific, it's an assault on language itself.