Yes they do. They know a Mac is different to a PC and they know a phone isn't the same as a desktop. They just don't know what that's called. They still have an intuitive understanding. They still understand that phones do annoying things like denying file system access. They understand that Microsoft products make it harder to save files for no reason. Most people understand the appeal of Linux if you explain it in familiar language. They've just been conditioned by society to fear change.
Drag is using language you can understand easily, because drag is talking to you. To a normal person, drag would say "You know how on your phone, you can't just look at your files? Like you have a separate app for photos, and documents, and you can't just look at all your files from one app like you can on PC? Well, you can actually if you use an android. Here's the app that does it: https://play.google.com/store/apps/details?id=com.google.android.apps.nbu.files&hl=en_AU"
Drag even casually named an operating system during that speech, and would have been understood perfectly by most people.
Kids today barely know what a file is. I have to regularly explain folders and file types. When I asked them where they saved a thing, they answer "On the computer" and look at me like I'm crazy for asking that.