I guess our definition of what makes a sim these days has changed with so many other kinds of simulator games out there.

This explains it fairly well I think, top comment:

https://www.reddit.com/r/ImmersiveSim/comments/m049dn/why_do_you_consider_system_shock_to_be_an/

"I don't just consider the original System Shock to be an Immersive Sim, I consider it to be 'THE' Immersive Sim, why? because unlike most "Immersive Sims" it's not bloated by abstract leveling systems and skill trees, it's literally "you are now in a hostile space station, find a way out", not "you are now in a hostile space station, find a way out, but you should put these magical points into these imaginary stats to make your survival easier"."

It's just part of the name given to the entire subgenre, I don't think it particularly fits either.

What makes it a sim? Genuine question, not being cheeky.