That's the way I would take it OhNoCb. It's definately not an instruction to not go around.
Just using the wrong phraseology - though interestingly that is what I was taught in college too!
It's non standard but i don't feel it was that ambiguous. I would certainly only use it for Circuit traffic/training traffic in a Wake Turbulence situation.
Instrument approach does not necessarily mean that he would not conduct a touch and go - it's not necessarily a commercial operation. Instrument training aircraft do this all the time.
Could also have been an error/slip form the controller, or maybe a student controller under instruction.