Cody provides incorrect code suggestions, explanations, or answers that don't match the codebase, despite retrieval succeeding; e.g., hallucinates APIs or misses definitions. Retry buttons appear after failed first attempts.

Automatic retrieval via Sourcegraph search on query tokens + local files may rank irrelevant snippets due to keyword/semantic mismatches in complex codebases, leading to poor RAG prompts and inaccurate LLM outputs. Blogs note ongoing improvements needed for relevance.