This is the Marxist conception of racism, because Marxists believe that any interaction between two people is primarily one of power. People who don't believe that every single interaction they have with someone is predicated on the power struggle between the groups they belong to, have no problem excluding systemic oppression from their definition of racism, because they believe that interactions exist between two individuals. If one individual makes a blanket statement about a person because of a racial group that they belong to, then that's racist, if you believe in the divinity of the individual.
No, it's a concept of racism that originates with people who abandoned Marxism for bourgeois identity politics. The right likes to call it “Marxist” because it originated with former Marxists and exists within a dialectical framework which replaces the Marxist class-conflict framework with a racial-conflict one, but it is very much not—and in some ways fundamentally opposed to—Marxism.
