I have the complete opposite feeling. The layman understanding of the term "AI" is AGI, a term that only needs to exist because researchers and businessmen hype their latest creations as AI.
The goalposts for AI don't move but the definition isn't precise but we know it when we see it.
AI, to the layman, is Skynet/Terminator, Asimov's robots, Data, etc.
The goalposts moving that you're seeing is when something the tech bubble calls AI escapes the tech bubble and everyone else looks at it and says, no, that's not AI.
The problem is that everything that comes out of the research efforts toward AI, the tech industry calls AI despite it not achieving that goal by the common understanding of the term. LLMs were/are a hopeful AI candidate but, as of today, they aren't but that doesn't stop OpenAI from trying to raise money using the term.