No, it's around. In Zurich, for instance, are Grossmunster and Fraumunster. It's the word "minster," in English, that is rare.
They are churches. We do have the equivalent word in English--e.g., Westminster Cathedral--though I can't recall ever seeing "minster" by itself. My understanding is that the English word "minster" is derived from "monastery." I'm guessing the German word is too. Grossmunster was associated with a monastery; Frauminster with a convent.
Would I be laughed at if I referred to a cathedral in Germany as a Münster?
I couldn't say. People generally laugh at me, regardless, when I try to speak German.
I (as a German person) really had to look it up. I know the German city Münster, but I have never heard of the word itself. There are other words like "der Dom" or "die Kirche" that would make more sence, if you want to talk about churches. But I also like to learn new things!