A more clear example I don't have a link for, it was on Twitter somewhere: someone tested a photo from Suriname and o3 said one of the clues was left-handed traffic. But there was no traffic in the photo. "Left-handed traffic" is a very valuable GeoGuesser clue, and it seemed to me that once o3 read the Surinamese EXIF, it confabulated the traffic detail.
It's pure stochastic parroting: given you are playing GeoGuesser honestly, and given the answer is Suriname, the conditional probability that you mention left-handed traffic is very high. So o3 autocompleted that for itself while "explaining" its "reasoning."