I see, that's different from how I interpreted it. Thanks for clarifying.

I don't really see it that way. To me it's not downplaying anything. AI 'hallucinations' are often disastrous, and they can and do cause real harm. The use of the term in no way makes human hallucinations sound any less serious.

As a bit of a tangent, unless you experience hallucinations yourself, neither you nor I know how those people who do feel about the use of this term. If life has taught me anything, it's that they won't all have the same opinion or reaction anyway. Some would be opposed to the term being used this way, some would think it's a perfect fit and should continue. At some point, changing language to accommodate a minority viewpoint just isn't realistic.

I don't mean this as a blanket statement though, there are definitely cases where I think a certain term is bad for whatever reason and agree it should change. It's a case by case thing. The change from master to main as the default branch name in git springs to mind. In that case I actually think the term master is minimally offensive, but literally no meaning is lost if switching to main and that one is definitely not offensive so I support the switch. For 'hallucination' it's just too good of a fit, and is also IMO not offensive. Confabulation isn't quite as good.