> It was basically an early language model that predicted which characters are more likely than others, given what you've already types and it would adjust the sizes of the available next characters based on their probabilities.

"adjust the sizes of the available next characters": you mean assigning less bits to characters the most likely to come next, and more bits to the least likely characters to come next?

So it's not totally unlike adaptive Huffman coding but instead of updating the tree on already visited characters, here the tree with the weights of the possible following character is predictive?