Identifying them by misinforming them seems counterproductive.

Imagine if a math site temporarily said "2 + 2 = 5" in order to catch cheaters on a math test. You've caught some cheaters, but then some of them will continue thinking that 2 + 2 really is 5.

There must be better ways to do this.

Why would the editors of an online dictionary want to catch cheaters to begin with?

I don't think they wanted to "catch" the cheaters. This was not a real examination to begin with, it was just a simulation in order for the pupils to get a feel for how things will happen. The real testing will happen on the 31st of March.

It was more of an experiment/eye opener from the team of volunteers behind the online dictionary project.

Morality?

Same question here.

Assuming I understand this correctly, the only way to catch them is that they misuse one of the three most commonly used words....

That doesn't seem like it will provide enough evidence to actually "catch" a cheater.

These aren't commonly-used words, these are very obscure words the students are being asked to define. If a bunch of students all settle on the same completely-wrong definition, it's a fair guess they were cheating.

With an astoundingly high false positive rate, assuming it's a multiple choice test.

The guys running the dictionary didn't even know what was on the test, judging by the fact that they had to guess them by looking at traffic logs. So it's highly unlikely they settled on a fake definition that just happened to match an alternative choice on a multiple choice test.