Towards Mechanistically Understanding Why Memorized Knowledge Fails to Generalize in Large Language Model Finetuning

Lu Dai, Ziyang Rao, Yili Wang, Hanqing Wang, Hao Liu, Hui Xiong

Towards Mechanistically Understanding Why Memorized Knowledge Fails to Generalize in Large Language Model Finetuning: 13 upvotes on Hugging Face Daily Papers, #8 of 14 papers on 2026-07-13. Day-by-day upvote history. It lost 7 votes when the Hub removed votes in bulk.

Fine-tuning LLMs to inject new knowledge faces a critical challenge: LLMs can quickly memorize new facts, yet fail to use them for downstream reasoning tasks. We formalize this failure as the \textbf{Knowing--Using Gap}, characterized by an accuracy gap and a temporal lag between memorization and generalization. To understand this phenomenon, we fine-tune LLMs with unseen knowledge and monitor the spatial permeation dynamics of the knowledge internally using a novel intervention technique called self-patching. Self-patching identifies activation locations where relocating representations substantially improves failed generalization cases. These results are consistent with a knowledge-circuit misalignment hypothesis: memorized representations can exist internally but may not be routed to computation-effective layers. To demonstrate the practicality of this diagnostic finding, we design a simple heuristic strategy which recovers 58--75\% of the oracle headroom in generalization failure. Experiments are done cross-domain for the robustness of this finding.

Paper page on Hugging Face · arXiv

Data: hysts-bot-data/daily-papers-stats and the Daily Papers API. Open data: tardellirs/paper-pulse-data. Sister project: Model Pulse, the download history of every model on the Hub.