This is actually the one expression in English that - even after decades of using the language - my Dutch-language brain still has to actively translate. I'm always aware of this rapid 'no, hang on, this means the opposite of what you think it means', and then it makes sense again.
I just ran into it in an article just now, and for some reason decided to Google if I'm really the only one.
I'm really glad to have found this forum as a result, as it confirms I'm not alone in this. You can argue the meaning of the phrase in both directions, but the wrong interpretation comes closest to the Dutch expression 'allesbehalve', meaning 'anything but', which sounds like it should have the same meaning as 'all but'. I guess my confusion comes from that.