Neologism undersells what this term is being used for. It's a technical term of art that's created its own semantic category in LLM research that separates "text generated that is factually inaccurate according to ${sources}" from "text generated that is morally repugnant to ${individuals}" or "text generated that ${governments} want to censor".

These three categories are entirely identical at a technological level, so I think it's entirely reasonable to flag that serious LLM researchers are treating them as distinct categories of problems when they're fundamentally not at all distinct. This isn't just a case of linguistic pedantry, this is a case of the language actively impeding a proper understanding of the problem by the researchers who are working on that problem.

> This is the nature of language evolution.

Only if it sticks. Hallucination is such an unnatural term for the phenomenon I would be surprised to see it stick.

> Everyone knows what hallucination means with respect to AI

This is false. It took me months to realize this just meant "output incoherent with reality" rather than an issue with training—the natural place for perceptual errors to occur.

"Hallucination" is derogatory and insulting when aimed at normal people who hear normal voices which don't necessarily belong to corporeal beings, or originate in the natural world. Labeling "hallucinations" and pathologizing, then medicating them, constitutes assault and bigotry.

"Hallucination" applied to inanimate and non-sentient software is insulting and presumptive on a different level. I'm fine with "confabulation".