The only problem with the terminology is that there is a disconnect between what the common person on the street thinks the capabilities of an autopilot is versus its actual capabilities.
Ironically, you are experiencing the same kind of disconnect.
An actual autopilot is not much more than an airplane cruise control that maintains a preset altitude, heading, and airspeed, while the common perception is that it is essentially an autonomous robot pilot that can do everything up to and including dogfighting while the human pilot takes a nap.
Sigh, no. Yes, there are autopilots like that. There are also autopilot systems that can handle the takeoff and landing, and the most fancy-pants military autopilot systems can take off, fly waypoints, launch ordnance, and land without human intervention. They can't dogfight, but they can fly. This isn't even difficult any more! A radio controlled plane powered by a 16MHz AVR chip has no problem doing the same stuff.
You're wrong on literally every count, because Tesla won't even activate the feature for you until they've given you a lecture on the limitations of the system, so it doesn't matter what people think of the word "autopilot" in any case; Tesla is quite explicit about what it does and doesn't do, where you are or are not supposed to use it, and what the driver's responsibilities are. This driver clearly shirked his, and paid the price, just like any other driver.