Strawman in a sense were the party offering the unpaid internship distorts the value of the compensation through gaining experience. So the argument of the first party not being paid can be refuted by saying that compensation occurs through gaining experience.

You are right though, it's quite a stretch of the term.

What I wanted to say is that the party offering compensation through experience is, in my opinion, just trying to get free work and making it look like they are "paying" by "giving out" experience.

A person on a full-time internship should get enough to cover basic living expenses. The employer should pay (in money) what the work done is worth to them.