Right, it's not emulation in the sense of WinUAE or whatever, using a CPU to translate foreign instructions and what not. It is imitating a 68k CPU. Emulation has a broader meaning than software translation of CPU opcodes, and anything that changes its behaviour to mimic something else is emulating that other thing. From the Cambridge English dictionary, just for example:
"to copy something achieved by someone else and try to do it as well as they have".
Just because it's common to think of it in software terms doesn't mean that's the only meaning. But, as you say, we're splitting hairs here. The important point is that it doesn't behave 100% identically to a 68k CPU (because if it did, what would be the point?), so ruling it out of troubleshooting reduces the number of variables to consider.