This is a Chinese character that can refer to goats, rams, and several other kinds of "medium-sized animal with thick wooly coats and horns". English has no direct equivalent; we have to be too specific when we talk about these animals.
A model with a small number of neurons has to compact its concepts in order to fit within the parameter count while reducing loss. OP's article shows that the compaction is usually generalization: "goat" and "ram" get compressed into "羊". The canonical example of superposition, an image model where "car" feeds into a bunch of "dog" features, was shown to be actually generalization. In a sense, the model was so small that its optimizer didn't have the parameter budget to distinguish between "car" and "dog"; it has a single set of "thing that moves fast" features.
So basically, really small models are merging features into semantic buckets that are so generalized they don't make sense to big human brains unless we really, really squint. The buckets chosen happen to be what has the lowest loss, of course.