While I share the sentiment that the term "AI" is applied way too broadly these days, there is a point to be made that it's somewhat difficult to draw a clear line anyway.
Back in the early 20th century, chess was considered to be something only an intelligent agent can do. A few decades later programs became competent enough that it took a grand master to beat them. Today, it's hopeless to try and beat a chess program as a human.
The next barrier was NLP and understanding/generating text and natural speech. Speech recognition worked reasonably well 20 years ago and is close to human level today. Speech generation - given enough processing power - is now perfectly natural. Text understanding and generation is very close as well.
The development of AI bears an interesting resemblance to evolution in that sceptics are busy pointing to "missing links" and as soon as that link is discovered, they chase to the next one.
Intelligence itself is defined poorly enough as it is, and watering the term down by slapping the "AI"-label on everything doesn't help that. On the other hand, intelligence is a spectrum and on some aspects of that spectrum, machines have already surpassed humans decades ago (think of calculators, chess, memory, searching and indexing, etc.).
IMO, the most important distinction to be made is the difference between AGI and AI. A transformer model is AI in every useful definition of the term "intelligence", but it sure isn't "general intelligence" if only for the fact that it cannot actively query its environment for additional information and has no continuous stream of "consciousness".
Before we can dismiss a system as not being AI, we need a sharp enough definition of what we would define as AI first. A "I know it when I see it"-type of definition isn't helpful and always keeps the door open for the ultimate rejection: "but it still hasn't got a SOUL!"