Really good readers read by site words - but only after learning to sound them out phonetically and lots and lots of practice. Gotta walk before you run.
If a word is learned as a sight-word, and continues to be read as a sight-word, then it’s a sight-word. That usage is convenient, accurate and helpful.
If a word starts as a phonetic word, then it simply becomes a more and more automatic phonetic word. In fact, one expert says it if you sound out a word three or four times, it becomes permanently fixed in your brain.
Calling such a word a sight-word doesn’t help students but does help the bad guys keep Whole Word in play. I don’t think it’s a good idea to help the bad guys. On the contrary.