People incorrectly using terms they've heard other people throw around is not a new phenomenon. So your "When I first heard [$TECHNICAL_TERM_FOO] I thought it meant [$BLAH]" is not a compelling argument. The fact that people who are uneducated about something don't understand it very well is not a surprising outcome. It is the expected outcome.

Lots of people think that "public domain" means something other than what it does mean. (Coincidentally, the most common misunderstanding arises from an assumption that it means something very similar to if not exactly the same as what you thought of "open source".) And yet, its actual definition remains in effect.