Does Your Neural Network Extrapolate? Feature Engineering as Identifiability Bias for OOD Generalization

Out-of-distribution (OOD) generalisation through composition requires a system to discover invariant properties from input-output associations and transfer them to novel inputs and unseen tasks. We argue that confirming compositional learning requires more than OOD evaluation alone: one must also verify that the learned features are genuinely compositional and that the system encodes their compositional rules. We demonstrate this through two tasks with clearly defined OOD metrics, generated via composable high-level abstractions, on which three standard architectures (MLP, CNN, Transformer) and an object-centric, slot-based architecture fail to generalise OOD. We pair these tasks with two novel attention-based architectures featuring an interpretable final hidden layer designed to expose whether compositional representations emerge. One architecture carries an engineered inductive bias that enables near-perfect OOD performance on one task. Our results show that even with appropriate biases and near-perfect OOD accuracy, a model can fail to learn the compositional feature structures necessary for systematic generalisation. The interpretable layer reveals that successful OOD performance is driven by task-specific biases rather than the discovery of reusable compositional primitives. These findings indicate that OOD benchmarks alone are insufficient for evaluating compositionality in neural networks.

A model generalizes outside its training distribution only when it computes a representation structurally equivalent to the generating mechanism, not an approximation fitted to it. Such equivalence is necessary for exactness in and out of distribution, and extrapolation is governed by this exactness at inference, whatever its realization. Tensor Logic shows this: a zero-temperature contraction is equivalent to discrete logic, deducing in place with no artefact extracted, its tensors Boolean, its embeddings orthonormal, only its arithmetic continuous. Lacking infinite recursion it reaches Datalog, not Prolog, and though exact over closed domains it needs external memory to bind a novel entity. The criterion needs neither a discrete representation nor an extracted expression, and constrains inference, not training: an exact marginal in $[0,1]$ passes, a Neural Network thresholded to a hard label does not. Logic Tensor Networks fail it, while differentiable ILP and Tensor Logic at $T=0$ pass. Piecewise-affine extrapolation divergence and an inability to bind novel entities are two faces of a shortfall in exact representability. For hybrid architectures, a propagation rule follows: the output inherits the bounds of every fitted estimator on its path, explaining which axes fail in equivariant models and the ARC-AGI induction/transduction split. Only an exact hypothesis class certifies what the training data leave underdetermined: on a law-derived partition it finds the $56.3\%$ of distant queries that are answerable, which ensembles meet with false confidence and distance metrics rank backwards. Common inductive biases, from symmetries to memory, reach exactness only because humans inject them, an argument for inducing exact representations rather than fitting surrogates whose residuals, even at the arithmetic floor in training, diverge outside the data and compound under composition.

Deep generative models offer a natural foundation for out-of-distribution (OOD) detection, yet prior work has shown that their assigned likelihoods are notoriously unreliable indicators for in- vs out-of-distribution data. In this paper, we address this problem by leveraging the diffeomorphic and mass-preserving properties of continuous normalising flows. Our analysis shows that OOD samples are mapped to noise samples that are highly atypical under the noise prior in ways not captured by the likelihood. Based on this observation, we propose a new method -- Signal in the Noise (SITN) -- for OOD detection on the single-sample level. SITN requires no access to OOD data, incurs minimal computational overhead, and provides strict control of false positive rates. Comprehensive evaluations through standard benchmarks and synthetic perturbations highlight the method's effectiveness and the absence of the complexity bias inherent to likelihood-based methods.