IMO this whole concept of "hallucinations" is a made up buzzword (in the context of AI) to distract from the fact that the companies who are writing/training these models know full well that what they spit out is just as likely bullshit as it is "correct".

Saying "we have no idea if it's going to spit out something accurate" doesn't sell.

"oh it's hallucinating, how cute" is an easier sell.