Why are finished and completed games considered on the backlog? I figured backlog would be designated for games you are meaning to get to, but haven't started yet. Google defines it as "an accumulation of something, especially uncompleted work or matters that need to be dealt with." To me it doesn't seem to fit completed games in that.

When you add games to your collection, there's a checkbox for 'Backlogged'. If you've completed a game but when you add it to your collection that box is checked, it'll still show as backlogged.
When you 'Add Completion', there's a checkbox for 'Remove this game from my backlog?'. If you check that box when you add a completion, it will remove it from your backlog. (I believe it defaults to checked)
I'm not sure which of these two is causing the problem, but yeah the backlog is non-completed games, or games you still intend on doing more with.

I believe it works in that capacity. I was more talking about the "My Stats" section with the asterisk at the bottom, "*Games marked as Finished or Completionated are considered to be in the backlog"

Generally speaking, the site only considers your backlog to be the items in your collection that you check the backlog option for. However, that particular report considers everything you completed as being in your backlog at some point so it can provide some indicator of progress. The typical flow is when you enter a completion, the corresponding game in your collection is removed from your backlog, which would result in that report always show 0%. Since it's an outlier to the rest of the site, I added the footnote to help explain how the numbers are calculated.