Your one example doesn't make all of LLMs a lie.
It's like someone reading a National Enquirer article about "Hillary Clinton being an alien from outer space" (a real headline topic from decades ago) and drawling the conclusion that all journalism is "a lie". The user has to understand media literacy and be at least a little skeptical of the claims that are made, then cross reference with another source.
Okay, but the anecdote states that every model repeated the pseudo-factoid about Foobar square, not just the 4 GB open source model equivalent of a tabloid.