Depending on how strongly the chaff produces clutter, the missile can "think" it is the target.
The difference between chaff and a mountain is that chaff returns noise in a very small concentrated spot, whereas a mountain will return noise in a much wider area. Depending on processing techniques, the missile's avionics might determine that a small concentrated spot of noise = target. Remember that we have old radars in DCS, even in FC3 planes, nowadays radars are much more advanced.