Calling Linux distros operating systems is a very common usage.

Linux distros are operating systems in my dictionary. Unlike Linux which is just an OS kernel.

It seems like an operating system to me. What specifically is misused?

The technical definition of opoerating system is the software that manages the resources of the computer, i.e. RAM, storage, processor time, etc (Typically known as the Kernel).

This usage is more "User Interface" or "shell".

"Operating system" has no real technical definition, it's a term that doesn't cleanly map to all the stuff we call "operating systems" today. Even the "technical" definition you gave is murky, that definition does not care _where_ the software is running. It easily encompass software running outside of the Linux kernel, much of it is expected to be there for the system to function properly and support various kinds of programs.

This thing is distributed as an installable OS image and has pretty specialized software for make it manage your programs and data in a pretty specific way, IMO that's good enough to call it an operating system.