Came here to say the same thing. Medically confabulation is different than hallucination and far more similar to what is being described. Confabulation is seen with wernike-korsokoff syndrome which can be found in very long time alcohol use disorder. The patient makes up stories to fit the gaps in their memory without necessarily realizing that is what they are doing.
Whereas hallucinations are more like present sensory disturbances happening at that moment.
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