> Popper was talking about a very specific case, where the intolerant exploit the tolerance of a society to physically take over that society and enforce their views.

Where they pose a danger of it.

If you let them do it before reacting, you've already lost, and that's the point.

Anyhow, it's not widely misunderstood, AFAICT, since when it is invoked it is invariably with the strong implication, and usually the explicit statement, that that is the threat being addressed. You might at times question the judgement behind the assessment of the risk, but that's not a misunderstanding of the paradox of tolerance.