I think the "correct" usage of acronym is only when it is spoken as a word. But language evolves and all that.

You can see the tension in the way MW defines it (including the extended description). Like: here's the definition of the word, but some people use it when they actually mean initialism. This is in contrast to your more concise and cohesive definition of "[abbreviations] that take the first letter from each word". https://www.merriam-webster.com/dictionary/acronym