The problem with the hallucination argument is (1) that is much less of a problem with good current generation AIs, and (2) living conscious breathing human beings also have a disturbing tendency to make shit up, too. So a tendency to make stuff up doesn't really serve as a disqualifier for consciousness.
Also worth mentioning that the guiding rule of what's philosophical or not is whether it's actually useful. Actually useful philosophy usually becomes something else. Usual some scientific discipline or another. And as it turns out, theories of mind are likely to become extremely useful in the near future. Expect huge advances!
1) Good current generation AIs are specifically trained to reduce hallucinations. If we had new AI system that happened to not have hallucinations as a side effect of their training, then it would be convincing. But here, it looks like we have built a pocket calculator that answer 7+13 = 14, and on top of it, we added a layer that says "if the input is 7+13, then replace the output by 20". This pocket calculator still does not know how to calculate, we just added a layer to hide its mistakes.
2) Not only "make shit up" is not the same as "hallucination" (either "making shit it" is done when the individual knows it is unreliable, or when the individual was given wrong inputs), but the point is not to say "hallucination implies no consciousness", but "large quantities of hallucinations in situations where a conscious system would be unlikely to hallucinate implies no consciousness"