Well, It's not lying because the AI doesn't know right or wrong. It doesn't know that it's wrong. It doesn't have the concept of right or wrong or true or false.
For the llm's the hallucinations are just a result of combining statistics and producing the next word, as you say. From the llm's "pov" it's as real as everything else it knows.
So what else can it be called? The closest concept we have is when the mind hallucinates.
It's an inherent negative property of the way they work. It's a problem, but not a bug any more than the result of a car hitting a tree at high speed is a bug.
Calling it a bug indicates that it's something unexpected that can be fixed, and as far as we know it can't be fixed, and is expected behavior. Same as the car analogy.
The only thing we can do is raise awareness and mitigate.