Yes that's a helpful distinction to make. I am aware of these differences (lossy and lossless alike, you could argue that lossy should make use of a different expression to compression, as the actual concept of compression, i.e. with air or a liquid, involves no loss, these are imperfect metaphors and not really properly defined technical terms).

And because computer nomenclature frequently borrows physical concepts to use as metaphors, your assertion "this is not actually compression" isn't as absolute as you suggest. It actually is compression, just not in commonly accepted technical jargon, in the English language. For all you and I know (I don't speak foreign languages or know their computing jargon so well, do you?), the way that file compression and efficient data encoding is described in one language or another may well use the same word for encoding as is used for improved encoding efficiency. I used the expression "compression" just to make sure as many people as possible reading would understand.