It isn't really used to mean 'figuratively' though is it?
When someone says "I was so cross I literally exploded!" they are not explicitly pointing out that they didn't really explode, they're just using the word for some kind of emphasis.
When someone says "I was so cross I literally exploded!" they are not explicitly pointing out that they didn't really explode, they're just using the word for some kind of emphasis.
A better, similar example could be "I was so ashamed I literally imploded". In this case "literally" is just emphasizing a figurative implosion.
I think "emphasis" is really what this alternate usage is.
I had a weird experience when I rented the tux for my wedding. The tux came with a colored handkerchief that was meant to be tucked into the pocket of the coat in a decorative way; and the guy showing me how to do it kept using "literally": "Literally take the handercheif, and literally fold it over so, and literally put it in the pocket so."
I was a bit bemused, but I didn't say anything, because he was literally taking the handkerchief, folding it over, and so on. But it seemed a bit strange to use it that way; I would certainly never have interpreted him as saying to metaphorically fold the handkerchief, so why emphasize "literally"?
I posted the experience to FB, and someone pointed out that he was simply using the word "literally" for emphasis: in this case, emphasizing how simple the steps were.
When people say things like "My head literally exploded", they're doing the same thing: simply using it as an intensifier.
The insistence that simple emphasis is a valid use for "literally" -- and quoting M-W or the OED to support your case -- is just as prescriptive the insistence that it doesn't.
Language is socially constructed by the people using it; we all "vote" by using it, and by policing its use.
So let me ask you this: Do you want "literally" to be a meaningless emphasis word (and thus lose its ability to specify "this actually happened")? Or do you want "literally" to mean "I am not speaking figuratively, this thing actually happened"?
If you want the former, then I disagree with you, but sure, go ahead and use your "vote" to police people objecting to "literally" meaning "figuratively". But if you want the latter, then join me in insisting that it means "this actually happened".