When they say "can't hallucinate" they mean they produce a confidence value for every result, so you could see for example it has 0.1 confidence, and you can disregard the result - that'd be different from hallucinating where it believes it's correct
that's right, but because these models are probabilistic, it's also possible to be confidently wrong (and all future models will be smarter still and still have that possibility)
Technically speaking when you send the prefix “The capital of France is “ into an LLM it will also produce probabilities across its whole vocabulary.