The fundamental difference is that the AI doesn't know anything. It isn't capable of understanding, it doesn't learn in the same sense that humans learn. A LLM is a (complex!) digital machine that guesses the next most likely word based on essentially statistics, nothing more, nothing less.
It doesn't know what it's saying, nor does it understand the subject matter, or what a human is, or what a hallucination is or why it has them. They are fundamentally incapable of even perceiving the problem, because they do not perceive anything aside from text in and text out.