#ChatGPT is already famous for not being able to do a histogram of the letter in a word. But if you ask it to make up an (back)acronym, in my experience it usually can spell.
The best explanation if I've seen so far is that the tokens are encoded as if all languages were Chinese symbols, e.g. cat = 1564. ChatGPT's neurons doesn't directly know 1564 corresponds to c, a, t and is doing this by inference. But that doesn't explain why it can make up correct acronyms.