Key detail in the actual memo is that they're not using just an LLM. "Wallach anticipates proposals that include novel combinations of software analysis, such as static and dynamic analysis, and large language models."
They also are clearly aware of scope limitations. They explicitly call out some software, like entire kernels or pointer arithmetic heavy code, as being out of scope. They also seem to not anticipate 100% automation.
So with context, they seem open to any solutions to "how can we convert legacy C to Rust." Obviously LLMs and machine learning are attractive avenues of investigation, current models are demonstrably able to write some valid Rust and transliterate some code. I use them, they work more often than not for simpler tasks.
TL;DR: they want to accelerate converting C to Rust. LLMs and machine learning are some techniques they're investigating as components.