If you always interpreted it that way then you were in the vast majority for a very long time. TSN, mainly Button because he is rather stupid but not just him, has been pushing it but it makes no sense. No one ever talked about best on best tournament and threw out the 1998 Olympics, 1987 Canada Cup, oh and the 1995 WJC. Everyone, or very close to everyone, is aware that they are different things. Then again in the last ten years there is a big push to leave words meaning whatever the speaker desires as opposed to a reasonable standard. Unless all of the best players are somehow under 20 it cannot be a best on best because the best aren't there.
For what it's worth, there has never been a WJC without players missing due to the NHL and other professional leagues. Even the famous 2005 tournament Canada didn't have Burns and Horton because their NHL teams didn't want to release them.
Because they aren't the best players. Whatever age limit exists at the 2026 Olympics for example, I think it will be that players have to be 16 and up, won't matter because all of the best players are 16 and older. It's most of the best junior aged players... but they are junior aged players, not the best players except in very rare instances.