No, the name is definitely confusing. It's only named that way for historical reasons.

Even historically there isn't a particularly well defined set of requirements for a subsystem. The closest to win32 was the subsystem for Unix applications, that loaded psdll.dll and used PE format executables even in the "Unix" environnement. WSL1 used elf files and required a custom execution process: bash.exe called com which called into the kernel to set up a special lightweight process supporting Linux syscall translation/implementation. Wsl2/wsa are Hyper-V based.

They claimed it was for trademark reasons. I think it's bullshit. They could have come up with a better phrasing that still puts the word Windows first, and whatever additional criteria that legal was worried about. They just don't care about making sense.

Even making it "Windows subsystem for Android applications", a one word addition, would be clearer.

it is clearer but also crosses into the territory of being a whole-ass sentence rather than a name