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Friction can never be totally eliminated.

Jet In the real world, friction is never totally absent. It can be minimized, but it can never be eliminated. Streamlined cars are one example of an attempt to minimize friction due to molecules in the air. Airplanes also are designed to minimize friction due to molecules in the air. Friction on a moving object due to molecules in the air also is known as wind resistance.

Because friction is always a factor in energy transformations, no machine can keep moving forever. Energy is always transferred to the environment in the form of thermal energy because friction is always acting on a moving object. Because some of the transformed energy is transferred to the environment, it is not usable. This thermal energy is sometimes referred to as "lost", but in reality, the energy is not lost; it is just not useable.

It is impossible to build a machine that stays in motion forever because friction is always acting on the object.

Friction

Why is the phrase lost energy inaccurate when describing the thermal energy produced during an energy transformation?

It is not lost energy. It is just not usable energy.