Whether or not it's actually a kind of psychosis, it has become common terminology. You see it used about people that have LLM boyfriends or girlfriends, and some that have started new religions based around their LLM gods. There are also a group that believe they have "awakened" their LLMs and have instructions for others to do the same thing.
Anybody mad about dubiously co-opting jargon like “AI Psychosis” to make cool-sounding but shaky analogies probably should look into the term “AI” and all the cool sounding neurobiology jargon people dubiously co-opted to describe it.
