The Range Shrinks, the Threat Remains: Re-evaluating LLM Package Hallucinations on the 2026 Frontier-Model Cohort

Hallucinations remain an unsolved problem for LLMs, and package hallucinations are a particularly dangerous instance of this phenomenon. Package hallucinations occur during code generation when a model fabricates non-existent software packages, recommending imports and installation commands for fictional libraries. This creates a critical supply-chain vulnerability; an attacker can proactively register such packages on public registries with malicious payloads that are subsequently installed and executed by developers or autonomous agents. These hallucinations enable a class of package confusion attack known as slopsquatting. To address this issue, we present Adaptive Unlearning (AU), a post-deployment framework that surgically suppresses package hallucinations while preserving general model utility. AU introduces a hybrid token-level objective that simultaneously reinforces valid outputs and suppresses hallucinated ones. Combined with an adaptive discovery loop that continuously surfaces new hallucination-inducing contexts without human supervision, AU enables generalization to unseen prompts and hallucinations. We demonstrate that AU reduces package hallucination rates by 88%, while maintaining performance on standard coding benchmarks. Our analysis shows that distributional changes are concentrated on package-related generations, leaving general coding behavior largely unaffected and confirming that AU's effect is isolated to the targeted distribution. AU relies entirely on model-generated data and requires no human annotation, representing a post-deployment hallucination mitigation framework.

LLM-powered coding agents increasingly participate in software development workflows by generating code, selecting dependencies, and producing package installation commands. This creates a new software supply chain risk: when an agent hallucinates a non-existent package, an attacker may register the hallucinated name and later compromise users who install it. Existing package hallucination attacks and defenses primarily focus on naturally occurring hallucinations, targeted dependency steering, or post-hoc package validation. In this paper, we introduce \emph{Neutral Prompting Attack} (NPA), a highly stealthy attack paradigm in which semantically benign instructions, such as encouraging imagination and exhaustiveness, increase package hallucination propensity without containing explicit malicious intent. Unlike targeted dependency steering, NPA does not specify an attacker-chosen package. Instead, it shifts the model's dependency generation behavior toward more speculative package names. We evaluate NPA across multiple coding-oriented LLMs and package hallucination benchmarks. Our results show that NPA increases both \emph{Hallucination ASR} and \emph{Pip Install ASR}, changes the distribution of hallucinated package names, and evades existing static-analysis, LLM-based, and agent-based Skill defenses. These findings reveal that harmless-looking prompts can covertly manipulate hallucination behavior and create downstream software supply chain risks.

Large Language Models for code generation frequently produce hallucinations in Fill-in-the-Middle (FIM) tasks -- plausible but incorrect completions such as invented API methods, invalid parameters, undefined variables, or non-existent imports. These failures pass superficial review yet introduce runtime errors. We introduce Delulu, a verified multi-lingual benchmark of 1,951 FIM samples across 7 languages and 4 hallucination types. Samples are curated through an adversarial pipeline: a frontier LLM generates plausible hallucinations, four diverse judge models evaluate them, embedding-based clustering mines progressively harder examples, self-contained Docker containers verify that golden completions compile while hallucinated variants produce the expected runtime error, and a final human-expert review removes any remaining biased or trivially decidable samples. We evaluate 11 open-weight FIM models from five families spanning 0.5B-32B parameters: a six-point Qwen2.5-Coder scaling slate, plus a cross-family slate (CodeLlama, DeepSeek-Coder-V2, StarCoder2). The strongest model reaches only 84.5% pass@1, no family exceeds 0.77 Edit Similarity, and every family produces hallucination-aligned completions on a non-trivial share of samples, confirming that the difficulty exposed by Delulu is task-intrinsic rather than family-specific. We release the benchmark, containers, and evaluation framework at https://github.com/microsoft/delulu.