Earlier quoted context omitted.
That is the "sanewashed" version of the slogan, yes. Ultimately it's classic motte-and-bailey, a slogan that means entirely different things depending on whether you're playing attack or defence at any given time.
If you're aware there are multiple interpretations of the slogan, why not assume good faith, and debate the "sane" meaning of the phrase? Most people are centrists, so the "insane" interpretations are never going to get any sort of audience any way. Debating the "insane" interpretation is easy - a cheap win.
If you tell me "We should kill all the Jews, and by 'Kill all the Jews' obviously I mean that we should increase capital gains tax by two percent" then I'm not going to debate capital gains tax with you, I'm going to tell you to go away and come back when you stop using words in such a deliberately ridiculous way.