I wasn't touching the question of psychosis one way or the other, though it's an interesting question in its own right. (I have seen one account dedicated to defending a personal deep friendship with Claude and a few others analogizing our ignorance of LLM welfare to historical disregard for African Americans, which I think is a bit much. Most cases I think are just wrong but short of full on psychosis. I think there are likely psychosis cases out there but probably one-offs).
And I know Substack covers a lot of stuff so even just AI talk is a slice of everything, and whatever psychosis on that subject a smaller slice of that slice. But using LLMs to make overextended arguments about LLMs being conscious is popular right now, more popular than it is well substantiated I think.
I agree you raised a big question, but I think yours is one of many big questions: whether some future version of LLMs might literally be conscious is also a big question and not a moot one in the way you seem to be suggesting. I think that what you're right about is that replaceability renders moot any question of whether it's ability comes from being "actually" intelligent.