Exactly. It's not extracting information, it is (as the Boston Marathon link says) hallucinating the additional information. It's an artist's impression, not CSI's magic 'enhance'.

In terms of the danger of this kind of image confabulation, it seems similar to the block-based compression on Xerox photocopiers which sometimes changed numbers in scanned documents: http://www.dkriesel.com/en/blog/2013/0802_xerox-workcentres_...