Agree. Incorrect response, or faulty, or erroneous, and/or unsuitable.

We do not call it "hallucination" when a human provides unfounded, or dubious, or poorly-structured, or untrustworthy, or shallowly parroted, or patently wrong information.

We wouldn't have confidence in a colleague who "hallucinated" like this. What is the gain in having a system that generates rubbish for us?