It is a bit of a misleading term. Especially with "Strength" being a defined game term (are they saying a
GEQ needs to be
str 1 for this to apply?

)
But, I've ALWAYS seen it interpreted as meaning "less than 50% of the number of models originally in the squad still survive. Although, even this is a bit of a grey area.
If an
IC starts the game with a two-man squad, one of the squad is killed, and the
IC leaves, is the squad at 50% (1/2) or at 33% (1/3) or at 67% (2/3 still alive, although not in the squad)?
And, what if an
IC joins a squad of 10 with only 4 alive? Is it 40% (4 of the original 10 live), 50% (5 currently in squad and original was 10), or 45% (5 alive out of 11)?