From what I have seen "world models" are more like video models. The idea is: from a video clip, predict the next frame, like LLMs predict the next word/token from a bit of text.

The idea is that these models should be able to internalize the laws of physics and properties of objects just like LLMs do with grammar rules. To make training more efficient, frames from game engines with hardcoded physics are used. The application is mostly robotics, including autonomous vehicles.

This is a bit different, the idea is to write a physics engine, it means numbers: like for an airplane model, calculate the climb rate. The application is mostly science and engineering.