It is not an hallucination, but a model limitation.
If you look at the API response you should get a detailed error:
BadRequestError: Error code: 400 - {'error': {'message': 'Reasoning input items can only be provided to a reasoning or computer use model. Remove reasoning items from your input and try again.', 'type': 'invalid_request_error', 'param': 'input', 'code': None}}
But as the response you got, you can reconstruct the conversation and keep going, if you think it is worth it.