Well suit yourselves, Nvidia clearly highlighted the part that TDP is defined differently by different companies. If you search online, you will find that Nvidia has always rated TDP as the max power under high gaming load.
Also, if you bother to look into the BIOS of their reference cards, you will see the stock power limit correspond to the rated TDP.
In fact, AMD has stopped using TDP for their GPUs at least. If you look at the official RX 480 page and product documents, it clearly states "Board Power" to remove any and all doubt as to what it could mean.
Sure, logic from Nvidia's defition would extend to the cooling solution. If it is designed to run at 120W under heavy gaming load, the cooler will be designed to dissipate 120W worth of heat.