They didn't say they were going to "no longer use the term (with respect to the Defold engine)". They said weren't using it. Why? Precisely so "as to not confuse it with the OSD". Let's recap:

They used to use the term "open source" (one part of an overall effort to misrepresent themselves and their work). Then they said they took it out—which means that if the term is there now—and it is there now—then they either didn't actually take it out, or they took it out and then put it back in, even after saying they were "sorry for misrepresenting the license under which we make the source code available".

Prevaricating on the whether or not a known bad actor is technically wrong in sidling up next to a line they've already once crossed isn't a defense of the subject of here—because the subject is not strictly confined to whether or not they are crossing it now. It is the very fact that they've indisputably crossed line before, admitted to it and issued a presumed sincere apology when called out, and yet here they are—reaping the rewards of the misleading[1] way in which their messaging is being perceived (again).

1. <https://en.wiktionary.org/wiki/misleading>