Well, they don't have the right to define anything, but this isn't a matter of law. "Open source" is industry jargon, it is well-understood in the industry, and very few experts are going to disagree, especially not by many of the people and projects that popularized the term "open source" to a wider audience, like Linux.

They could've chosen a phrase less likely to be mistaken, that was not already in use, and this might've saved us a lot of arguing. But then again, the term "free software" could've won out instead, and things would be even worse. Personally, I think it'll be OK.