A Geometric Analysis of Small-sized Language Model Hallucinations

ArXi:2602.14778v3 Announce Type: replace-cross Hallucinations -- plausible but factually incorrect responses -- pose a major challenge to the reliability of Large Language Models (LLMs), especially in multi-step or agentic settings. Existing work largely frames hallucinations as a consequence of missing knowledge; we show instead that, even when the relevant factual knowledge is present, models still produce hallucinated answers, pointing to retrieval instability rather than knowledge gaps.