The reasons people can’t sell a product with a blatantly wrong label is because it is fraudulent. However, when words gain widespread use to mean something else, then people can certainly use them that way.

OSI might vehemently argue against people using “open source” to describe source available works, but… people do it. Someone does it in every comment section discussing this topic. People post their source code on GitHub without a license and call it open source. For several decades before the OSI was founded, the phrase “open source intelligence” was used to describe works that were public available, not those that were licensed in any particular way. It is, factually, not uncommon for people to use it differently than the OSI prescribes.

The fact that people have a disagreement on the use of the term is exactly why people have leeway in the use of the term.

To use food as an example, there are a ton of foods that are culinarily labeled “incorrectly”. The reason why they are legal to sell is because people used the words that way.

If you want to use “fried” as an example: consider refried beans. They are often not even fried once!

https://wearenotfoodies.com/culinary-misnomers-or-danish-pas...

“Organic” is a different story, it’s regulated in many places.