Are Webster's Dragons "Now Rare"?

It has been rather common among some creationists to use a portion from the 1946 "Webster's Collegiate Dictionary" to support the notion that "dragons" (or contemporary dinosaurs) were considered "rare but real" creatures at that time, judging from the first alternative definition listed under the word "dragon", which reads;

1. Now Rare. A huge serpent.

Notice also how it continues with the following definition;

2. A fabulous animal, generally a monstrous winged scaly serpent, lizard, or saurian.

Now, as far as I'm aware, this can be interpreted in two ways; (1) it could possibly read as "now rare" as in the animals, while being real, are very rare; (2) or it simply reads as a word or definition that is "now rare" in usage, where it is also worth noting that the second definition actually uses the word "fabulous" (i.e. mythical) to describe the animal, indicating the authors didn't actually intend to describe any real creatures. Note also that the format of the phrase is capitalized and italicized to distinguish it from the definition itself.

Now, to make things clear, I am personally convinced that the various tales and legends of "dragons" (or "monstrous winged scaly serpents, lizards, or saurians") throughout history are actually best understood as generally and originally being derived from human encounters with real creatures such as large ancient reptiles (e.g. dinosaurs, pterosaurs, mosasaurs, and plesiosaurs etc).

Essentially, I contend that the word "dragon" seemingly represents nothing else but the old equivalent to the more modern word "dinosaur" (originally coined by biologist and paleontologist Sir Richard Owen in 1841 as "dinosauria"), which has been commonly used by the general public as an umbrella term for various similar remarkable reptilian beasts. However, to use this dictionary argument as evidence for this stance is problematic to say the least and highly advised against.