Latin America is included, but that whole section is just problematic; as the second paragraph said you wouldn't call a badass from America a Badass Englishman, and like America Mexico has a history of throwing off Spanish rule. Hence calling a Mexican a Spaniard just makes zero sense.
And in the real world, Spaniard refers exclusively to someone from Spain or with Spanish citizenship, whereas their descendents in Latin America are called Criollo if Wikipedia is to be believed. So it doesn't matter if the trope says it can include Latin American characters as Spaniards, it is still wrong (just like if the Evil Brit
trope said the character didn't have to be British and could be from one of the former colonies that would still be wrong, since Brit refers to someone from Britian, just like Aussie is exclusively for Australians, Kiwi is exclusively for New Zealanders etc.).
Furthermore the discription in the trope is almost-exclusively about the Spanish; the page quotes are exclusive to Spain, the description has the character using a Spanish weapon and fighting like a Spanishman would, and speaking Spanish. It's invoking a lot of Spanish imagery, but trying to shoehorn in Latin Americans leading to the idea that anyone who speaks Spanish as a first language is a Spaniard.
What we really have here is two different tropes; Badass Spaniard
, which is invoking Spanish Imagery, and Badass Latino, for Spanish-speaking people who are better associated with their country of orgin then the country that colonised them.