From the Wikipedia page on one of the strongest ever[1]: "Like Leela Zero and AlphaGo Zero, Leela Chess Zero starts with no intrinsic chess-specific knowledge other than the basic rules of the game. Leela Chess Zero then learns how to play chess by reinforcement learning from repeated self-play"
Leela, by contrast, requires a specialized structure of iterative tree searching to generate move recommendations: https://lczero.org/dev/wiki/technical-explanation-of-leela-c...
Which is not to diminish the work of the Leela team at all! But I find it fascinating that an unmodified GPT architecture can build up internal neural representations that correspond closely to board states, despite not having been designed for that task. As they say, attention may indeed be all you need.
More likely, the 16 million games just has most of the piece move combinations. It does not know a knight moves in an L. It knows from each square where a knight can move based on 16 million games.
We also don't know what internal representations of the state of play it's using other than what the author has discovered via probes... Maybe it has other representations effectively representing where pieces are (or what they may do next) other than just the board position.
I'm guessing that it's just using all of it's learned representations to recognize patterns where, for example, Nf3 and Nh3 are both statistically likely, and has no spatial understanding of the relationship of these moves.
I guess one way to explore this would be to generate a controlled training set where each knight only ever makes a different subset of it's legal (up to) 8 moves depending on which square it is on. Will the model learn a generalization that all L-shaped moves are possible from any square, or will it memorize the different subset of moves that "are possible" from each individual square?