Instead I would say they DREAM. Dreams follow some logic but basically they are disjoint from reality. They involve same characters as our real-life experiences but what those characters do in a dream is not based on reality.
So one could think that ALL LLMs ever do is dream but much of the time their dreams are dreams which feel very real.
Our dreams are basically an LLM based on our real experiences but recombined in arbitrary ways, still retaining some logical structure but now detached from reality because when you recombine different experiences including our thoughts from real life, the result cannot really reflect reality very well. LLMs are better in this respect than our dreams, but sometimes their "dreams" get really obviously detached from reality.
Or if you want to use the term "hallucinate" with LLMs then fine but its more like they hallucinate all the time, it's just that sometimes, even often, their hallucinations seem to agree with the reality so well that we cannot tell the difference.
LLMs do not describe reality because they cannot experience reality, all they can give us is an "average description" created from many existing descriptions.
One way of looking at it is to say that all LLMs tell us is hearsay.