There are certainly some older people who still mean lunch when they say middag, and there may also be some local variation, so you may even hear it from younger people. However, we think it would be too confusing to approve both options in this case. We are after all teaching Standard Swedish.
Indeed, 'dinner' refers to the main/most important meal of a day, 'supper' is the evening meal if one wants to be explicit. While in many western countries the dinner is the supper, on the other hand, in many eastern countries it is the lunch which should be referred to as dinner. It leads to a lot of confusion though, so I stick with saying 'dinner' and meaning 'supper'...