To paraphrase @Jeremy, No, you are incorrect. That's not the best example, but "to paraphrase oscar wilde" should get you over 50,000 hits, the vast majority of which will be OP's second usage.
It simply doesn't make sense to classify such a common usage as "incorrect". When people use paraphrase in this way they obviously don't mean they're trying to express Wilde's exact (or even approximate) original meaning in different words. Usually they're deliberately making a few well-chosen word changes to produce a witticism about something Wilde never had in mind.
It's true that express exactly the same sentiment in different words is one meaning of paraphrase, and I'm sure this must surely be the earlier usage. But it's certainly not the only meaning.