I think in the context of the games, the term "Universe" may be used to include the Chrono Planet, all eras/all time, and each timeline.
Rather than saying it'll destroy the planet, which in the case of these games, could only mean one version of the planet. "Universe" is/can be a more simple way of conveying everything that's attached to the planet, lavos, and the player's experiences. The term "universe" often is used for all characters and events in a certain collection of storylines from the same property, like Marvel Universe, Kevin Smith's movies, or in this case, the "Chronoverse". It's not that far-fetched.
In this case, the term is not overstated, just overgeneralized, and the theory actually makes a lot of sense.