Has "utilise" lost its meaning in America?

My Webster's says

utilize |ˈyoōtlˌīz| verb [ trans. ] make practical and effective use of : vitamin C helps your body utilize the iron present in your diet.

USAGE Utilize, borrowed in the 19th century from the French : utiliser, means 'make practical or effective use of.' Because it is a more formal word than use and is often used in contexts (as in business writing) where the ordinary verb use would be simpler and more direct, utilize may strike readers as pretentious jargon and should therefore be used sparingly.

I have never heard utilize to mean "use an object for a task for which it was not intended." Indeed, when I googled the British spelling, I got this:

utilise - put into service; make work or employ for a particular purpose or for its inherent or natural purpose;

[Emphasis my own]

This directly contradicts your assertion of a contrary meaning for the word.

Thanks to its cognate in French, utilise is in most senses identical to use. The -ise suffix means it's a process (the process of gaining utility), and it's often used in business speak to suggest effective or deliberate use - think of it as "use to your profit". It can also be used to avoid ambiguity or negative connotations (e.g. utilising rather than using a workforce).

It doesn't mean to use an object for a task for which it was not intended. For that, there are plenty of words, but I prefer to use hack.

I observe a slight difference between them, but not quite the distinction that you expect.

"I occasionally use the second bathroom in my house, but it will be utilized when my nephew moves in."

In that sense it means to give utility to something. This seems to match the idea of using something for an unintended purpose, but also matches the idea of beginning to use something for its intended purpose after it had not been used (to its fullest capacity) previously.