Isn't friend zone the state of liking someone you've been friends with for a long time so it's awkward to tell them how you feel?

It's sad this meaning was lost to so many people using it just as a euphemism to being rejected

Friend-zone is not being rejected by "let's just be friends" it's a state of having feelings towards a long-term friend. Usually it's precisely that you value their friendship why you're afraid to make things awkward by coming out to them.

It does. Getting feelings towards a long-time friend and being afraid to come out to them is a real thing.