This behavior has been called 'confabulation,' and I think the name fits well. Other people call it 'hallucination.' Confabulation in people occurs after brain

This behavior has been called 'confabulation,' and I think the name fits well. Other people call it 'hallucination.' Confabulation in people occurs after brain damage or dementia. They make stuff up while being convinced it was a memory of theirs. I haven't seen a model yet that rejects unlikely matches when it runs out of good material, it could make it more useful.