In case anyone is still seeing this, iTerm2 3.3.6 has a bug which can cause the popup still to appear even with both parts of dpk's answer applied (that is, with Force Click disabled, as well as Perform dictionary lookups set to No).
I am one of the people that this fails to fix it for. (I'm on Mojave 10.14.6 on a 2017 15" MBP, fwiw.)
As per the issue page, another fix was put in place in 3.3.7 (the latest release version at time of writing), but apparently even that hasn't fixed it for everyone. The latest beta of 3.3.8 has another go at fixing it.
I just found the above issue, and have not yet tried 3.3.7 or the 3.3.8 beta to see if it fixes it for me. This is the most annoying feature of my Mac by far, so I will probably try the 3.3.8 beta soon, and I'll report back here if I do (and when 3.3.8 exits beta.)
Apparently I forgot to report back in a timely manner. Something about a novel virus? ... 3.3.8 beta did indeed fix it. Now I'm on 3.3.11 (and Catalina) and no signs of regressions, so well done team iTerm2. Third time was a charm.