Wait

Josei is a demographic, not a genre. Yaoi is aimed at the josei demographic

It's not used as a tag for Yaoi/BL though.

Why wouldn't it be? I've seen it used often. Yaoi is aimed at the josei demographic. Josei covers a huge range of genres aimed at adult women, and yaoi/bl is one of them. Just like how shoujo demographic can also cover bl aimed at young girls

It's a genre, not a demographic. Josei are mature stories involving older women. If someone is using it as a demographic, then they have their definitions crossed.

Josei is not a genre just as shoujo/ shounen/ seinen etc are not genres...... If you go to manga store in japan, where these terms are from, you will find multiple genres under these categories. If you go the the josei section, you will find a wide range of manga/translated manhwa spanning from romance, horror, BL etc...
Josei legit just means, "Japanese media targeted at women 18+"

In a physical store. Again, I'm pertaining to tagging here, online. because Josei gives the idea the characters are a straight couple or MC is a straight woman above 16/20 yo.

No it doesn't. The term itself, with a simple Google search, pulls up that it's a term that simply means "Women." The issue here is that you keep taking it outside of the very context it's assigned to and proceed to mix up the notion of Targeted Audience and "A style of storytelling normally involving (blank)."

Your targeted audience is your demographic while your MC, setting, plot, mood and method are descriptors for the genre you're writing for.

(accidentally pressed Post)

While a genre may have a targeted audience, it doesn't mean they're the only ones who read it. Something labeled as Yaoi or Josei may have a key demographic that shows a majority of customers are females from the ages of 16 - 25, but that doesn't mean guys don't read it either. As a matter of fact it's only fairly recently that the male demographic has been considered for the BL spaces, even if they are a minority.

Demographics only illustrate interest from particular groups.

If a person is going into the store for something specific they want to read, that genre tells them what type of story they're getting themselves into. Josei will let you know you're about to read a mature story involving a female main character, while other tags like Smut or Slice of Life will tell you the tone.

Your mistake (that goofball whose tagging wrong) is that you're saying "this is Yaoi and it's for women only." And that does not make sense. It's Yaoi and it's going to involve sex between male characters. It's Josei and it's going to involve mature situations involving an older female lead. This is the point of a genre.

I highly suggest looking at where these terms come from and what they are used for when they are being used as tags. While "josei" does literally translate to "woman", in this case when labeling and tagging media, it is used for the target demographic, just the same as shoujo/seinen/shounen etc. Just because it is the target demographic, doesn't mean others outside can't read or enjoy, it is just the target audience it is originally intended for.

Josei manga tag legit just means targeted for adult women, just as shounen means targeted for young boys. Yaoi's main target audience is adult women, hence why the josei tag is applicable in this circumstance.

Though I don't like using wikipedia, I feel it is better than sending you an untranslated JP site. Therapy game is the example here. It is clearly labeled as josei, just as all the BL mags these ch by ch serializations come out in are josei mags.
https://en.m.wikipedia.org/wiki/Therapy_Game

I feel it does a great disservice for woman targeted media (josei) when people turn the meaning of the term into a very small genre when in fact, it encompasses so much more than just "adult woman in mature setting". If you browse this tag on this site, you will find countless works correctly tagged that don't fit within your very narrow definition. Horror, action, BL, mystery etc a lot of which do not include an adult females as main characters.

Just to add to this, your narrow definition of "adult women in mature situations", can now encompass anything geared towards men as well (seinen). So any of those hentai mags with female MCs in adult situations would also fall under the josei category in that circumstance. This is why labeling demographics is important

Read a dictionary and convince the literary industry that your definition is right and the professional application of the terms is wrong.

You're not changing it just because someone is mislabeling and you don't like being corrected.

I would love an official educational link to your resource where the Japanese term is properly translated, defined, and used in the literary context you describe. Help a bro out! Sharing is caring :)

You're wrong. The other person is right. Josei has always meant that it is MAINLY targeted to women from age 18-40. This OBVIOUSLY doesn't mean other people can't enjoy it.
And those stories with "mature situations involving an older FL" are targeted to the josei audience, thus falls under the josei category. But josei isn't limited to stories with that theme/genre only. It includes BLs and actions genres with no romance or no FL stories as well.

For example, 07-Ghost is an action anime for josei audience. So as karneval, usagi drop, diabolik lovers, hachimitsu to clover, uta no prince, servamp, makai ouji blah3

And a quick Google search for "josei" will help you clear up your confusion.
And here's a link to MAL's anime list for josei demographic.
https://myanimelist.net/anime/genre/43/Josei