For me, I have no problem with the term. A game like the above mentioned HarnWorld is very much leaning towards being able to tell the players something about the in game fiction when you invoke the mechanics. In other words, it's actually simulating something. Doesn't have to be something real at all. The point of a simulation isn't to simulate reality - it's to tell you what happens when you input specific parameters. You tell the simulation that X and Y are true, and it tells you that Z happens because of that.
That's kinda where I tripped earlier and talked about how. How would be answered by a more detailed simulation. The more detailed the simulation, the more How gets answered. But, at the very basic level, a simulation has to answer what.
((Note, this isn't specifically addressed to you
@Charlequin - I'm just riffing off of this hereafter))
We could simply flip a coin for combat. Heads you win tails you lose. Now, no one would call that a simulation. Why not? After all, it has all the same results as D&D combat. The only difference is granularity. In D&D combat, you have a few more coin flips (with a rather funny looking coin

) but, you arrive at the same level of information as a simple coin flip. Nothing in the system actually tells you anything about what happens.
Compare to a system with hit locations. Now, at the very least, you can say where an attack hit. But, then you run into the next problem - one attack doesn't track 1:1 to 1 swing of the sword. It's meant as an abstraction of any number of actions that could occur in a round. But, let's ignore that. At least with hit locations, we can at the very least have mechanics that kinda/sorta tell us what happened in that round.