This is exactly there's been a shift to using other acronyms, such as UAP (Unidentified Aerial Phenomena), which don't have the same baggage.

Universal Alien Persons

It's because UFO is never used to mean "plane of unknown precise identity or origin country". Other terms are used for those, like "plane with its transponder disabled" or whatever.

The problem is, when UFO reports occur they invariably seem to objects that cannot fly by any sort of conventional aircraft physics:

a) There are no wings. Ever.

b) They are often reported as moving slowly or even hovering, which missiles cannot/would not do.

Thus UFO has come to be synonymous not with its literal meaning of a flying object that doesn't light up with proper ID codes on radar, but a flying object that is not merely unidentified but unexplainable. Unexplainable Flying Object would be a more accurate expansion given how it's used. That doesn't automatically imply aliens, but the whole "secret military breakthrough" angle is no more falsifiable than aliens are.