Google's AI mode is extremely hit or miss. At it's best it's a more flexible version of their old pagerank "I'm feeling lucky" button, where the LLM does return an appropriate response ...
However AI mode seems to be largely RAG, so it's supposedly authoritative answer is often just some online forum comment it picked up, such as a couple days ago when it fed me back something I had just posted myself 30 min earlier!
It does at least dump you into Gemini chat, so when the initial answer is obviously wrong you can try to drill down to get something better, but presumably many people are taking the initial answer as some sort of "AI truth" when it is far from it.
The main problem with OP's experience is that the AI response has absolutely nothing to do with the search results and is functioning purely as a chatbot.