Hmm. I looked it up again when posting the last one and I am pretty certain it only refers to the percentage used in the texture file.
Also. Texture Quality does not mean the visual quality or sharpness of the texture (which many seem to think, including me at the beginning) but simply how close your texel size is in relation to RCs estimation of the smalles texel size possible. This however is only an average value which can be quite inaccurate with complex models, if there are large differences in depth on one image.