In the real world it’s just a couple of words. Leagues can name their champions whatever they want. A league could call it’s champion the King of all Siam if they want, they don’t even have to have anything to do with Siam, it could even be a womens league, because it’s their league and they can call it what they please.
Doesn’t really matter what your precious sailing championship did. I guarantee if I wanted to go through the rules I could find a reason why it’s completely bogus to call it a world champion. Except I wouldn’t because I don’t care. I don’t care what any league call their champion.
Really your own argument shows how painfully silly your complaint is. There has never in the history of sports been a world champion that defeated all comers. There’s always going to be some sort of rules system that limits who vies for the championship. And even in sports with a system that has all members of the league play each other at least once, the league itself is artificially limited, and nobody beats everybody. So in your world, according to your rule, there has never and will never be a “World Champion” in any sport, including the one you participated in.
If you participate in an international sport (doesn't matter what sport it is), and the international governing body of the sport stages a competition that is designated as The World Championships for that sport, and all the best talent from all over the World gather together to contest that championship then the winner is rightly called "World Champion". It's as simple as that.
It may just be a "couple of words" to you, but words mean something, and just because you, or anyone else, cares to label yourself as something doesn't make it so.
By your argument we can all get fake degrees and false medals and become instant professors or war heroes.
The world doesn't work like that.