It means the plastic decomposes under industrial composting conditions, with requires a timeframe. There are two types of composting: industrial and home composting. Usually composting means industrial composting.
Industrial composting conditions are controlled and set at higher temperatures (55-60°C), combined with controlled humidity, presence of oxygen and presence of specific microorganism-balance. The regulation EN 13432 requires at least 90% to disintegrate and break down in CO2 after 12 weeks. The break down should not have a negative effect on the quality or processing speed of the compost.
Home composting conditions have lower and less stable temperatures. That doesn’t mean, that the material can be disposed in the nature or degrades in water or soil, it means e.g. that it disposes in garden compost under specific conditions. In Europe, there are DIN Certco and TÜV Austria, which are examining the home composting, but not yet with an EU regulation, but only French and Australian standard.