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Zero knowledge means that you can convince someone that you know something without showing them that something.

More info on https://en.m.wikipedia.org/wiki/Zero-knowledge_proof

I have a feeling that this is not zero knowledge and we’re all getting bamboozled.

The main thing is that the encryption keys never leave the browser. So even an engineer in control of the backend cannot see the information being saved. With E2E encryption the owner of the data usually also handles the decryption keys.

Aren't the engineers controlling the backend also controlling the frontend? What's stopping the frontend from exfiltrating the encryption keys?

Yes, everyone started miss-using zero knowledge when they mean E2EE.

Including several password managers and companies I hoped would have known better.