My assumption is that sensationalized UAPs are illusions, but the reason the military keeps putting out press releases about them is not because they're aliens. The first reason is that there are unidentified aircraft entering US airspace. They're likely cheap attempts at both intelligence collecting and psychological warfare on behalf of US adversaries. Drones are easily mass produced and a nation flying a handful of drones in US airspace can easily send hundreds/thousands/millions because of how cheap and easy they are to make and deploy.
Since drones can vary in size and be flown in a ton of different conditions/patterns/scenarios/etc, they might be hard to detect. The mainstreaming of the "UAP mystery" narrative encourages civilians to look for, record and massively platform adversarial drones should they be seen by people, but go undetected by systems that are looking for them. The narrative also neuters whatever attempt at intimidation or psyops adversaries are waging against the public/military/etc. "Our militaries can send whatever we want into your airspace and there's nothing you can do about it" can be a powerful message that was effectively neutered with "maybe they're aliens lol".
https://www.forbes.com/sites/davidhambling/2020/05/11/us-nav...
Regardless, liminal warfare will continue to give rise to this kind of scenario so we should try not to outsmart ourselves in a desperate bid to be right
Depends on the domain. Underestimation could lead to perceptions of weakness and opportunity for attack. Even if you are prepared for attack, not getting attacked in the first place is better than getting attacked at all.
Same goes for positioning in negotiation.