Not really, no. The FSF definition of 'free software' is accepted by the technical community as the definition of the term. Same goes for the OSI's definition of Open Source.
> not everyone automatically understands the terms according to these definitions
Not really, no. No-one knowledgeable about these topics is going to insist upon non-standard definitions of the terms. Marketing drones may abuse the terms, and ignorant people don't know any better than to be imprecise, but they are not the same thing as what you are suggesting.
Debian do not make up their own definitions. They explicitly mention both the FSF and OSI in their article on licensing. They certainly have their own ideas on intellectual property (their famous objections to Mozilla's rules about the Firefox trademark), but I don't see them redefining any terms. They are careful to use Debian Free Software Guidelines (DFSG) when referring to their own rules. [0]
Aside: it can be helpful to capitalise to emphasise that you mean the proper definitions of the terms, e.g. The software is neither Free Software nor Open Source. Clunky, sure enough, but people do occasionally make up their own definitions and run with them, often enough that it's a problem for clear communication.
I'm not really sure why. Making up your own personal definitions for terms already in common parlance, is usually treated as an exercise in obtuse silliness, for obvious reasons.
Usually, no exception is made for when an accepted technical term is misused in common parlance, e.g. using 'theory' for any explanation that pops into your head, or referring to an automatic rifle as a 'machine gun'. In those instances we separate the popular use of the term from the technical one, and still insist on correct terminology in technical circles.
[0] Point 31 of https://people.debian.org/~bap/dfsg-faq.html
At least for "free", it (used to be?) very common to add an "as in" after, like "free as in beer" (you don't have to pay) or "free as in speech" (you can do what you want with it).
Who benefits from watering them down? People who want to take advantage of confusion to release their software under weaker licenses while taking advantage of the "open source" or "free software" names.