I understand what you're saying, but I think ultimately the phrase 'work-life balance' is just shorthand for "I'm spending too much time at work and its disrupting the other parts of my life that are also important to me but that I've been neglecting".
This is what I disagree with, because I think people use it that way when they speak, but their behaviours say something else. They are blaming their workplace as the problem, but that is rarely even close to the full story. As fucked as so many workplaces might be, the problem isn't in the workplace for the most part, because they are working on a known algorithm of profit maximisation. Any employee can jump ship - but the vast majority do not. If all the unhappy employees jumped though, burnout wouldn't happen, nor would that company survive.
The collective understanding is irrelevant. It is similar to everyone thinking the earth is flat 500 years ago (and millions of people now too weirdly).