As far as I can tell most people just use it as a shorthand for “wow that was weird” but there’s no difference as far as the model is concerned?
Wrong is saying that the sun rises in the west.
By hallucinating they’re trying to imply that it didn’t just get something wrong but instead dreamed up an alternate world where what you want existed, and then described that.
Or another way to look at it, it gave an answer that looks right enough that you can’t immediately tell it is wrong.