This actually gets at the heart of the problem with the current batch of LLMs.
They have no concept of truth, and so will gladly generate tokens that are "likely", but are at best clearly wrong, or worse look correct to a non-expert, but are subtly wrong.
With software at least you can run it and inspect the behavior for flaws. Or have the results be validated by an actual programmer for correctness. And hopefully the developer using the LLM understands the limitations, and understands how it can hallucinate incorrect but convincing results.
However even software engineers I know, who are aware of all of the above issues, will ask ChatGPT questions about fields they aren't familiar with and view the results as authoritative. It's the same effect as when you read a news article about a topic you're familiar with and can immediately see flaws, shortcuts and exaggerations; but then you turn the page to a topic you aren't an expert it and say to yourself "what an interesting article".
The example from the article is even worse, since the author asked for an explanation of the code, and it hallucinated a clear and convincing but completely wrong explanation. Again to a programmer it is obvious, but to a layperson it's actively deceptive.
I could easily imagine a scenario where some asks ChatGPT, what is the best combination of chemicals to clean mold from a ceramic surface, and it responding with "Bleach and Vinegar are the perfect way to clean a ceramic surface." and following up with an explanation like "Vinegar de-greases the surface allowing the the disinfectant power of the bleach to penetrate into the mold". Which all sounds reasonable, unless you know beforehand that those chemicals mixed produces toxic chlorine gas.
Now that was definitely a contrived example, but unless you know and constantly question the output of an LLM you could easily be misled. Especially if you are asking about topics outside of it's training data or with minimal training examples.
Maybe with enough training data or some combination of transformers with reinforcement learning that has a "truth" metric, hallucinating completely incorrect information can be reduced to an acceptable level. But at this point it seems intractable.