It's a correct use of literally, but I think the change to the dictionary definition is in error. It's simply an example of hyperbole, which is a thing you can do with any word.
> It's not a hyperbole lmao.
I disagree, obviously, but perhaps an explanation is in order so that we can be sure we're talking about the same thing (and give you something more specific to argue against if you still disagree).
The difference between "X is Y" and "X is literally Y", when both expressions are figurative, is that the latter is meant to be strengthened by overstating the degree to which X is in fact Y. I contend that this is a hyperbolic use of "literally".