Micro-credentials have gained significant interest due to their potential to create flexible learning pathways and offer real-time, up-to-date training for the rapidly evolving labour market. Additionally, international organisations have highlighted their capacity to elevate the value of non-formal education and foster inclusive higher education ecosystems involving diverse stakeholders. This research critically examined the initial conceptualisation of micro-credentials, as presented in foundational OECD and European Commission documents, emphasising their objectives, their role in formal and non-formal education, and the inclusion of diverse actors. A systematic review of completed Erasmus+ projects integrating micro-credentials was conducted using the PRISMA protocol to explore their practical application, including the types of competencies developed, delivery frameworks, and actors involved. Findings reveal a disconnect between the initial intentions and real-world implementations, with a predominant focus on professional competencies, limited engagement with non-formal education, and insufficient involvement of diverse stakeholders. The study concludes with recommendations to harness the full potential of micro-credentials to revitalise higher education by embracing a holistic, inclusive, and equity-driven approach.