I was the one who suggested that name (the setting was already going to be renamed, I just suggested the actual name, which the team them accepted), and I do still stand by it, and I will try to explain why.
First off, the original name of the setting was no longer accurate: S3TC is one form of compression, however 469 supports multiple compression formats nowadays beyond S3TC, which was the main reason why it was renamed to begin with.
So, regardless, the setting needed a new name since it was now misleading and not completely representative of what it actually did.
Secondly, it was NOT self-explanatory at all.
When someone looks at a setting with "S3TC" in it, their mind does
not go immediately to "oh, so this will enable those awesome higher resolution textures", not at all, although in practice that's what it really did, and still does.
People were only able to connect the "S3TC" naming with "higher resolution" when it was used together with "high-res" or "HD", including in the guide you put together:
viewtopic.php?f=6&t=12927
as well as the original setting description:
UseS3TC - [True/False]
Enables the use of high resolution S3TC compressed textures if they are installed.
which by your own argument is not accurate either, since, like you said, S3TC compression does not necessarily have to be "high resolution".
Therefore, if the setting had to be renamed anyway to better describe what it did, in a common way that players understood what it did, then it only stands to reason that it should be named after what it's intended to do in a manner that any player understands what it does.
And "UseHDTextures" seems the most accurate name for it, because compressed textures are normally used, pretty much exclusively, for HD textures.
There's really no one using uncompressed HD textures (no one who is sane, at least), nor compressed SD textures either (it would actually just increase file size needlessly, so it would be wasteful), so it seems to me that it's pointless to be pedantic with the naming, especially when all the explanations surrounding this setting (including yours) always refers to the setting as a way of enabling high resolution textures, so might as well give it name that actually represents what it's intended to do in practice in the context of the game.
Also, this setting was already renamed to "UseHDTextures" since the first 469 public release, namely 469a.
Just mentioning this last bit since you seemed to imply that it was renamed again in the latest 469b release (?), which isn't the case.
