People say that people use literally to mean figuratively now which is literally the opposite of literally, but I've literally never seen someone use literally to mean figuratively. I have often seen it used to hyperbolize the strength of analogies or generalizations, which means they apply literally somewhat figuratively, but that doesn't mean that they literally mean for literally to mean figuratively.
Literally is literally a point. Figuratively is a point only figuratively, literally it is a continuum. If you're not using literally to literally mean literally, you are literally using it to mean figuratively.
No, if you aren't using it to mean literally, you are using it figuratively, but not necessarily (or ever, IME) to mean figuratively (usually as an intensifier to a statement that is expected to be understood as figurative from context.)
Would you be less likely to interpret it as such if the speaker had omitted "literally"?
I would say that the sentence is an example of hyperbole. "I am so figuratively dead right now it's as if I am literally dead." The meaning of literally, there, remains intact.
In the same way, when someone complains that you left them waiting for "days" we don't say "sometimes days means ten minutes" but that sometimes people exaggerate.
If I say "I literally broke my arm" after I actually broke my arm, that use is completely correct. But you cannot be literally dead and still type a message, unless it's an automated message that you ordered someone/something to send AFTER you died.
If I'm on my regular nightly haunting mission, and I decide to speak to the new owner of the house that I'm haunting, how do I convey to them that I am really, actually, truly dead? I could say, "I'm literally dead", but they would think I'm laughing at their joke they just made!
If the answer to this is to avoid the word "literally", and instead replace it with "really, actually, truly" (like I did above), then I might just decide to retire from haunting.
