The recursive acronym tradition of course (GNU's Not Unix, Eine Is Not Emacs etc) traditionally implied the implementation being superset or better than the thing it's replacing and referencing in the acronym.

Wine FAQ concludes

> "Wine is not just an emulator" is more accurate. Thinking of Wine as just an emulator is really forgetting about the other things it is. Wine's "emulator" is really just a binary loader that allows Windows applications to interface with the Wine API replacement.

Try to remember that hardware emulation is not the only kind of emulation.

Wine (written as WinE when I first encountered it, IIRC) emulates the Windows runtime environment.