That's because, based on the training data, the most likely response to asking for directions is to clarify exactly where you are and what you see.

But if you ask it in terms of a knowledge test ("I'm at the corner of 1st and 2nd, what public park am I standing next to?") a model lacking web search capabilities will confidently hallucinate (unless it's a well-known park).

In fact, my person opinion is that, therein lies the most realistic way to reduce hallucination rates: rather than trying to train models to say "I don't know" (which is not really a trainable thing - models are fundamentally unaware of the limits of their own training data), instead just train them on which kinds of questions warrant a web search and which ones should be answered creatively.