I think hallucination rates are not a matter of model size but depends on the training of the model. They have been trained on a huge corpus of material that had overwhelmingly well formed questions and we'll formulated and correct answers. This is typically the case of books where the material is highly curated by experts in the field. In a book you never see a question which admit no answer and the book just reasoning and explaining why and how the question has no answer. Neither you will see a good question and the book explaining candidly it doesn't know the answer , because the way the book material is curated the author will omit discussing the question for which it has no answers.

In addition, I think that during HFRL, the labs has a bias for interesting answers that admit a solution and under represent the "bad" questions that admit no good answer. In addition they probably do less effort to HFRL on questions the model should admit it doesn't know.

As humans we have been trained all our lives, in the real world, to be confronted with questions we don't know the response right away and we learned to very quickly assess that we don't know or that we are not sure about the answer.

Another thing we have and LLM have not is fear. We have an amygdala in our brain, separated from the logic thinking part, that can raise a signal of fear so that we get much more carefully about what we say. On the other LLM has no fear organ like the amygdala and just learn to respond based on the patterns in it's training corpus. It never "fears" looking bad or being fired because it gave a wrong answer so it can merrily give perfectly wrong answers.

So, we see hallucination rates can be improved with training but currently the lab are not optimizing for that because there is an high stake race to get the most intelligent and capable model.

Alternatively I can see creating a separate amygdala-like organ for an LLM and that organ may asynchronously fires signal, based on the user prompt and the LLM thinking trace, to inject into the LLM reasoning a fear signal so that it can steer it's answer to something more safe.