If lay people are misunderstanding what incognito does, and cannot be expected to understand how it truly functions then Google shouldn't be allowed to advertise it to lay people in the way that they do.

It'd be easiest to just not provide incognito mode at all, than allow another footgun into the hands of the public at large in a way that only benefits Google.

I think though that people can be made to understand with better education and examples in a reasonable time period.