I wouldn't call it hallucination. It would be coherent stories that fit their belief system and allows them to short their brain. [0]

Coherent stories that are blatantly false are great tools in misinformation and social engineering. [1]

[0] https://en.m.wikipedia.org/wiki/Thinking,_Fast_and_Slow [1] https://en.m.wikipedia.org/wiki/The_Art_of_Deception