It seems like a pretty good name to me. The point of the term "serverless" is that you aren't presented with any abstraction of a server; operations like "spin up more servers to handle the load" or "SSH to the server to figure out what's going on" or "reboot the server because it's acting weird" don't exist for you.

The term does get abused to refer to any server cluster with a bit of autoscaling logic, and in that sense it is a misnomer. But I don't think that's what it originally meant.