It's funny; I'm looking at your examples and coming to the opposite conclusion. I feel like it is very good because it provides explanations for unusual or novel words that are similar to what a human might conclude.
Would you expect that it would point out that "refuggle" is not a word with any documented usage rather than drawing a strenuous connection to a slightly similar word?
I find the connections it draws amusing. Since I'm not the inventor of the word "refuggle," I can't say that I know its etymology or how it relates to "refugee." But I guess this is one weakness of LLMs: they're bad at admitting they don't have an answer.
We know alot about how English has evolved. Word forms develop along certain paths, sound changes follow laws that linguists have described, and the "fuuuug" in refugee does not become "fugg".
Etymology is probably the subfield of the humanities that provides the closest thing we get to testable hypotheses and laws. This is just mashing shit together.
It also seems to have a tendency to just mash semantics together. As though having something resembling "pig" and something resembling "full" means "full AND piggish". But that's not how plain juxtaposition works in Germanic: it's specification, not conjunction. So "pigful" would mean a type of full, full of pigs. (This is language specific, by the way; as I recall in Vietnamese "mother-father" is the normal word for parents - but in Danish it means grandfather, your mother's father.)
I'm sure I could get WhateverGPT to hallucinate something that looks like those drawings chemists make of molecules to most laypeople. That would be about as interesting as this is.
Terryjambled means "mixed up in a confused or disorderly state, and covered with or resembling terry cloth."
Refugglemander means to "to manipulate electoral district boundaries in a way that impacts refugees."
I'm sorry, OP. This just isn't very good.