So, I'm not sure how the hallucination prop is supposed to work, but it's not disappearing. At all. I expected the thing to stop drawing moments after it comes into the player's view screen. But instead, I can look right at it and, besides being creepy because I chose a model of Atlas and its not animating or casting any shadows, it doesn't do anything hallucinatory.

I just thought I'd ask and see if anyone has made it work, or if its simply reverted to a bad prop_dynamic in Portal 2 (which makes me a little sad).

Anyway, I think that could be your problem. Of course, that can be worked around with custom FGDs. Or you could use a system of trigger_looks and so on.