When domains are loosely coupled, prompt refinement helps.
When domains are tightly coupled (technical, institutional, economic, human), it often doesn’t.
The failure mode isn’t hallucination in the usual sense. It’s misplaced confidence caused by internally consistent reasoning operating over incomplete or misaligned signals.
In these cases, improving the prompt can increase coherence while decreasing correctness, because the system is being asked to reason through uncertainty rather than around it.
I’m less interested in techniques here and more in whether others have encountered similar limits when prompts are used for high-stakes, multi-domain reasoning rather than bounded tasks.