For the vast majority of streams it is accurately named as very few streamers use additional delays other thst a few competitive streams as the higher the delay the worse the experience between broadcaster and their community in chat.
As I mentioned, there’s no possible way for Twitch to know if the broadcaster is instituting a delay prior to ingest, so if you have some reason to know the precise delay just ask the broadcaster you’re working with as that’s the only way you’ll know what they’ve set, and then you can add that to the latency shown.
As for naming, I guess it could be more accurately be called “latency to the broadcast”, as it is the latency to what is being broadcast regardless of if the content is in real-time, delayed, or even a video previously recorded being broadcast.