Ascribing "hallucination" to an algorithm does reinforce anthropomorphizing however.

But it also helps lowering ourselves from the pedestal.

We don't yet understand how our brains work but they do "work" somehow and a lot can be understood by looking at how it "fails".

Hallucinations are an interesting window in how our brains work and seeing similarities with what other processes do can be useful

You make valid and interesting points.

I guess, for me, it is a matter of minimizing bias and implicit personification when considering the value AI has, as well as how to better understand it for what it is.

For example, I can better contemplate the innate intelligence of a whale if I do not attempt to quantify same based on what tools they create.

Perhaps that is just me though.