No, it does not. See the AIM, 14 CFR 1.1, and the AC's on GPS's. There is no such thing in them as "VFR enroute/terminal" capability.
The fact that something is not defined by the FAA does not mean that it doesn't exist, especially in the context of VFR navigation.
That is contrary to FAA guidance...
In order for it to be contrary to FAA guidance, there would have to be some FAA guidance. Since the particular guidance we're talking about is using terms that are not defined in a VFR context, I'd say that what we're dealing with here is a lack of guidance.
...but nobody's going to care as long as you stay VFR -- including the controllers.
Well at least we agree on that. And if I have to request an IFR clearance at some point during the flight, I won't be telling ATC that I'm /G if the plane I'm flying doesn't have an IFR-legal GPS installed.
When filling out a flight plan, I think it's important to look at what the information will be used for. Except for rare exceptions like DVFR, certain TFRs, departing class B airports, etc., the only thing a VFR flight plan will be used for is to help SAR people find you, so they should be filled out with that in mind. It makes no sense to limit VFR flight plans to IFR definitions of terms if there's ANY possibility that looser terminology may help you to be found. If the AIM says otherwise, then the AIM is wrong.
As for what the SAR folks will do with a VFR flight plan, I don't think they look anywhere beyond the route of flight block in order to choose a search area. Your route is their concern, not your navigational method.
We look at anything that might give us a clue about the missing aircraft's whereabouts.