As one cannot place excluded in a FROM clause (subquery) in the ON CONFLICT clause referring to it as a table, with plural rows nonetheless, leads the reader to infer more about what the behavior here is than is correct. We already just say use the table's name for the existing row so just match that pattern of using the name excluded for the proposed row.
The alias description doesn't have the same issue regarding the use of the word table and rows, as the use there is more conceptual, but the wording about "otherwise taken as" is wrong: rather two labels of excluded end up in scope and you get an ambiguous name error.
The error messages still consider excluded to be a table reference and this patch does not try to change that. That implementation detail need not force the user-facing documentation for the feature to use the term table when it doesn't really apply.