I find it confusing that author proposes llms.txt, but the content is actually markdown? I get that they tried to follow the convention, but then why not make it a simple text file like the robots.txt is?
Yes, and .py is "plain" text too. The extension however helps with signaling the intend of the file. Also, there is something to say for the argument "there is no such thing as plain text" [0]
If you had python code and you didn't want it to have syntax highlighting or be run/imported or any of the other normal things that you do with python files, it might make sense to have python code in a .txt. file.
Same idea here IMO. .md would signal the wrong intent, as you don't want to render it to markdown formatting or read as a markdown file normally is. You want it to be read as plain unrendered text.