You're describing costly signaling. Contrary to your opening statement,

The word 'signalling' is often used in Less Wrong, and often used wrongly.

people on LessWrong are usually using the term "signalling" consistently with its standard meaning in economics and evolutionary biology. From Wikipedia,

In economics, more precisely in contract theory, signalling is the idea that one party credibly conveys some information about itself to another party

Within evolutionary biology, signalling theory is a body of theoretical work examining communication between individuals. The central question is when organisms with conflicting interests should be expected to communicate "honestly".

In particular, the ev bio article even includes a section on dishonest signalling, which seems to be what you're complaining about here:

Seriously though, "signalling" is being used to mean "tricking people in to thinking that you are".

This post is still interesting as a highlight reel of different examples of signalling, and shows that the term is, in its standard usage, rather non-specific. It's just not an illustration that people here are using it wrongly.