[Doxin]

I think the core difference there is that the holodeck character feels like a character that is playing a person (because it is of course) whereas the LLM feels more like someone lying to you about who they are.

When watching a play the actor pretends to be a specific character, and crucially the audience pretends to believe them. If a LLM plays a character it's very tempting for the audience to actually believe them. That turns it from a play into a lie.