Semantic degeneracy represents a fundamental property of natural language that extends beyond simple polysemy to encompass the combinatorial explosion of potential interpretations that emerges as semantic expressions increase in complexity. Large Language Models (LLMs) and other modern NLP systems face inherent limitations precisely because they operate within natural language itself, making them subject to the same interpretive constraints imposed by semantic degeneracy. In this work, we argue using Kolmogorov complexity that as an expression's complexity grows, the likelihood of any interpreting agent (human or LLM-powered AI) recovering the single intended meaning vanishes. This computational intractability suggests the classical view that linguistic forms possess meaning in and of themselves is flawed. We alternatively posit that meaning is instead actualized through an observer-dependent interpretive act. To test this, we conducted a semantic Bell inequality test using diverse LLM agents as ``computational cognitive systems'' to interpret ambiguous word pairs under varied contextual settings. Across several independent experiments, we found average CHSH expectation values ranging from 1.2 to 2.8, with several runs yielding values (e.g., 2.3-2.4) that significantly violate the classical boundary ($|S|\leq2$). This demonstrates that linguistic interpretation under ambiguity can exhibit non-classical contextuality, consistent with results from human cognition experiments. These results inherently imply that classical frequentist-based analytical approaches for natural language are necessarily lossy. Instead, we propose that Bayesian-style repeated sampling approaches can provide more practically useful and appropriate characterizations of linguistic meaning in context.