This confusion reminds me of a scene from the 2002 film of Dave Barry's "Big Trouble".
(Driving to an airport) "Okay, we gotta pick a road. Arrivals or departures? We're arriving, but then we're departing."
(Driving to an airport) "Okay, we gotta pick a road. Arrivals or departures? We're arriving, but then we're departing."
- backwards compatible code: new code can run on an old interpreter
- backwards compatible interpreter: old code can run on a new interpreter
EDIT: After some thought, you're right. The second description is the reasonable interpretation.
"python 3.7 is backwards compatible with python 3.6"