Everyone uses the word "hallucinate" when describing visual AI because it's normie-friendly and cool sounding, but the results are a product of math. Very complex math, yes, but computers aren't taking drugs and randomly pooping out images because computers can't do anything truly random.
You know what else uses math? Basically every image modification algorithm, including resizing. I wonder how this judge would feel about viewing a 720p video on a 4k courtroom TV because "hallucination" takes place in that case too.
Both insert pixels that didn't exist before, so where do we draw the line of how much of that is acceptable?