This interpretation is ironic since the primary advocates of the UAP terminology are those emphasizing a scientific approach to the subject matter. Examples, NARCAP, The Scientific Coalition for UAP Studies, Leslie Kean, the UK Ministry of Defence. I don't think anything mystical whatsoever is intended by the most prominent users of the UAP nomenclature.
UAP was created as a term in order to avert the intense stigma that had been heaped upon the term UFO (which is such a vague term to begin with that it's worthless). This strategy was surprisingly successful, even though it's basically synonymous with "UFO," simply because it sidesteps decades of media stigma and widespread ridicule by complete assholes like Phil Klass. That fact alone made it the preferable choice for anyone who wanted the subject to be considered seriously.
But the word "phenomenon" does have a very vague and mystical implication, whether you personally feel that way or not. "Phenomenon" tends to define not only something that
isn't understood, but today it also tends to imply something which
isn't understandable or somehow supernatural. For example EVP means "electronic voice phenomenon" - allegedly this refers to dead people talking in the presence of a magnetic tape recorder and having their "voices" recorded by it. Psi powers are also regarded as a "phenomenon." Culturally, if not officially, "phenomenon" is increasingly becoming synonymous with "paranormal phenomenon," and I think this insinuation is leading a lot of people to think of exotic technology operating in our airspace as some kind of supernatural phenomenon like ghosts or some kind of magical mental projections.
The extent to which people participating in this field are favoring mystical/supernatural explanations is shocking. The choice of terminology is almost certainly a contributor to this troubling and totally irrational trend.