I think the difference is more to do with the fact that 'hallucination' is passed off as reality (whether it's ChatGPT confidently telling you that Abraham Linc

I think the difference is more to do with the fact that 'hallucination' is passed off as reality (whether it's ChatGPT confidently telling you that Abraham Lincoln had a MySpace page, or that weird guy on the train telling you that there are spiders in the seat cushions). People are usually able to distinguish between their imagined scenarios and the real world.