This seems like a tremendously unhelpful attempt at definition, and it doesn't really get better from there. It >seems as if it's written more to optimize for sounding Deep than for making any concepts understandable to >people who don't already grasp them.

There probably isn't any one single way of defining this in a way that is understandable by everyone. That being said, being able to make the distinction between direct experience and concepts is very useful and epistemology has helped many people with this, so I'd say there is value in it.

Whether the fictional evidence actually misses that factor or not, I can't say. However, the fact that the text mentioned that the extermination was for biological homo sapiens leads me to think that those artificial kids weren't supposed to be just substitutes for emotional purposes but could actually act as full member of your family. That is, you wouldn't consider them pets or slaves, but family.