They are not delusional.

Japanese car manufacturers were late to EVs, and in order to prevent a gap in the market where EV-first competitors can steal market share from them, they lobby the government to subsidize and create a new market segment in the form of hydrogen cars. There they have a head start via some latent research and more reuse of ICE car platforms. I'm sure the hydrogen division is well aware that they are doing research on a dead-end technology (at least for the automotive sector).

The exact same thing happened in Germany. In 2020 there was a huge push from politicians to push more hydrogen technology to distract from the fact that German car manufacturers were lagging behind, as well as general missed initiatives for renewable energy. Now, 6 years later those initatives are deader than ever.

Nope.

Splitting water into free hydrogen and oxygen is important because it is an essential step for using electrical energy in the chemical and metallurgic industries.

For long term energy storage, free hydrogen is not a good solution, but it can be used to synthesize hydrocarbons, which are suitable for long term energy storage or for aerospace transportation.

Even with abundant and cheap dihydrogen, using it for energy storage in vehicles is a bad idea.