A laptop is defined by how it is not a desktop just as a Lesser Dragon is defined by how it is not a True Dragon.
I can just as easily define a Desktop as how it is not a laptop. Also, on something you brought up later, you said:
Literally everywhere outside of TDs, sure. But within, it is never used for that meaning. In fact, on p. 144 of the same book, it further clarifies it as "built-in progression due to age". Therefore your interpretation is proven incorrect. DWKs have no progression due to age, and are therefore not TDs.
Check again. It says "Lesser Dragons have no built-in progression due to age." It is silent on whether True Dragons do or not. If you're looking at those rules, it means you have already determined that a dragon is not True.
My question here is if a lesser dragon is everything that isn't a true dragon, and "Lesser Dragons have no built-in progression due to age", then doesn't that mean that all true dragons do?
After all, If I told you that all 4 sided shapes with equal sides were either Rhombuses or Squares, and that to be a rhombus, a shape must a.) not be a square, and b.) have at least 1 non-90 degree angle, could you not say from that that all squares must have only 90 degree angles?
Considering the definition of a Rhombus is "a quadrilateral with all four sides of equal length", a Square is very much a Rhombus, so I would call you out on that.
Besides, I can name a few "Lesser Dragons" that have built-in progressions due to age. They may not be listed anywhere as to at what ages it occurs, but they do exist (Half Dragon Arrowhawks, Phaerim (which have a listed LA and as such would follow the "Lesser Dragons as PC's" rules), Kurthiks, etc.).
@Soro: Sidebar on page 4 of Draconomicon states that while the book mostly concerns itself with the 10 True Dragons in the MM, the definition is given to define what exactly constitutes a True Dragon for other cases. That is the ENTIRE POINT of that sidebar. The MM description has a shitload more exceptions than you like admitting. It says all True Dragons have breath weapons, an immunity, Blindsense, flight, wing attacks, spell-like abilities, and spellcasting. If it were defining anything beyond the 10 in the MM1 (for which it is true), then there are exceptions all over the place, including Gem, Lung, Faerunian, Planar...oh wait, everything
you just said it perfectly describes. Guess what? It doesn't.
Now, as for those "True Dragons as PC's" rules, there is another issue. That is rules of how to handle something, not a definition. At the time, those rules held true for all True Dragons (Races of the Dragon was printed several years later) and even in that, there are at least two exceptions (Force and Prismatic dragons, who never have an LA, so it doesn't vary from Wyrmling to Juvenile or from +2 to +6) Again, you can't point to the list and say that the absence of Kobolds means anything because at the time, they weren't even Dragonblood, let alone having 12 age categories and being able to gain the dragon type.
Seriously, neither side is ever going to convince the other. It all comes down to the reading of the line "advance through age categories." If read like it appears everywhere else in D&D, DWK's fit the definition. If read as "Advancement: By Age", then they don't. Both are valid readings and we can't tell one way or another how the designers even wanted it due to the fluff suggesting that it may have been intentional.
Truthfully, though, how much does it unbalance by letting them be True Dragons? The only thing I can think of is the whole "Old age Epic feats" thing. Sovreign Archtypes? I would let a Sorcerer trade spells known for Tiger Claw maneuvers any day (spells are more powerful). Loredrake is the only one that really leads to a problem. Dragon Ascendant? Considering the guy has to be level 39 before he meets the prerequisites (and his pre-epic levels had to be in a full BAB class), then let him. The feat in Draconomicon that gives them a bardic Knowledge-esque ability? Need to check on the eratta to see if they can even take it before its bonus is outclassed by standard knowledge methods (prerequisites just say "any three knowledge skills" with no regards to ranks), but even so, it's Knowledge checks.