I've been getting strong flashbacks to Patricia Pulling and the anti-Dungeons-and-Dragons panic. [0] Back in the 1980's, Patricia's son Irving committed suicide, and it was associated (at least in her mind) with him picking up Dungeons and Dragons. This led to a number of lawsuits, and organizations and campaigns from people who were concerned about role-playing games causing its players to lose touch with the boundaries between fantasy and reality, and (they claimed) was dangerous and deadly for its players.
LLMs / D&D forms an interesting parallel to me, because -- like chatbots -- an immersive roleplaying experience is largely a reflection of what you (and the other players) put into the game.
Chatbots (and things like LLM-psychosis) are on an entirely different magnitude than RPGs, but I hear a lot of similar phrases regarding "detachment from reality" and "reinforcement of delusions" that I heard back in the 80's around D&D as well.
Is it more "real" this time? I remain skeptical, but I certainly believe that all of the marketing spin to anthropomorphize AI isn't doing it any favors. Demystifying AI will help everyone. This is why I prefer to say I work with "Artificial AI" -- I don't work on the "real stuff". There are no personalities or consciousness here -- it just looks like it.