Its not rationalising, its statistically choosing the next token. Also, generally the LLM doesn't get defensive (although its not always the case.)
Its not like a dementia patient not finding their keys and gradually convincing themselves that someone stole them instead. Because the alternative, that they are loosing cognitive faculties, is too horrific to acknowledge.
This is why its so annoyingly problematic. too much humanising, and not enough witnessing someone with dementia "confabulating"
It is noise, and nothing else.