This seems overly pedantic. In my mind "incompressible" does not mean "there are absolutely zero situations in which the output could be shorter than the input.

This seems overly pedantic. In my mind "incompressible" does not mean "there are absolutely zero situations in which the output could be shorter than the input." There will always be (compression scheme, input) combinations that produce smaller outputs. The qualifying criteria is "does expected input data typically compress?" For a reasonable definition of incompressible, properly encrypted data is it.