Comment by sudosysgen

This is missing a common failure mode, which is information past the knowledge cutoff. If you need info past that time they'll fail no matter how big or small the model is, so the hallucination rate can matter independently of the knowledge base. If all use-cases had a uniform risk of falling out of support, this would be a valid argument, but since it's often the case that a datapoint is guaranteed to fall out of support, the absolute ability to recognize that is crucial.