They're not calling any output slop, they're calling indecipherable output slop. The management class responsible for hiring, firing, and paying people doesn't possess the domain knowledge to say for certain whether or not LLM output is optimal (which, in this context, means correct), but they will trust that it's good enough to justify further automation / fewer grant approvals / etc. So in that sense, slop can and will cause the economic issues people are concerned about.

University boards want the prestige of successful research programs. Doing the hard work to get something demonstrably true is going to lose out economically in this paradigm, where we are all being conditioned to uncritically ooh and aah at the incantations being elicited from these magic boxes. The oracles even have legions of zealots who will berate you for not being sufficiently deferential and reverent, or worse, accuse you of blasphemy. If for no other reason, I agree with using the term to express all of the above succinctly, even if LLMs can be helpful tools generally.