We generally send halllucinating humans to the hospital.
This right here is a perfect example of the problem of expectations. Do you have 100% accurate recall of every fact you've ever learned?
But we don't over-react when humans are fooled by optical illusions/magic tricks, or when they conflate two things, or when they confuse correlation and causation, or when they selectively prioritize some information over other information, or...
This describes the current state of AI, doesn't it?
I think that it does not happen at a level of persistence/pervasiveness that would cause the equivalent human to be hospitalized.