While I do agree with you on a general level, I think this is largely a discussion about how different cultures and languages use the word holocaust.

In Germany, the word Holocaust has a connotation that particularly emphasizes the exceptional nature of the event in comparison to everything that has happened before and since.

This connotation is not necessarily present in other societies, where the meaning is closer to the Greek root ‘holókaustos’ - ‘completely burnt, destroyed’ and this results in the difference between the Holocaust and a holocaust in English.

It is therefore understandable that the term holocaust is used in other languages for what is happening.

Is it helpful though? Here's my - slightly different - take of why using the word is not necessarily wrong... but unhelpful.

I myself prefer the term "genocide" in the Israeli-Palestinian context, especially because the term holocaust in close proximity to Judaism is extremely loaded and in this context has connotations that are less about Israel's terrible crimes and more about the somewhat conspiratorial accusation of ‘victims becoming perpetrators’ against Jews as a whole, which resonates with antisemitism and understandably gives rise to accusations of antisemitism to the point of completely losing focus of the important part of the discussion:

The state of Israel is committing extended, organized and deliberate genocide against Palestinians, out of hatred of and revenge against Hamas. This hatred and revenge against Hamas is justified. Targeting innocent Palestinians is not.

One can call this a holocaust, but this choice of word is more likely to derail the discussion and serve an entirely different agenda than the one that tries to achieve some end of the murders in Israel, Gaza and the West Bank.