If it’s well implemented, the cycle count is read from the system firmware or battery fuel gauge, and what the unit is depends on the fuel gauge firmware. Hopefully it’s full cycle equivalent, and doesn’t tick up every other time the current changes direction.
Li-ion batteries are complicated, and what counts as “a lot” depends on the chemistry. They also do lose health with time even without any charge/discharge, especially at higher temperature. You can handwave something like 500 cycles being a place most batteries should be able to get to in the absence of abuse or manufacturing defect, but there’s no hard rule, and “health” is probably a better indicator if the fuel gauge is reporting it from a fancy-pants degradation model that incorporates impedance spectroscopy (internal resistance vs frequency vs state-of-charge).
The way I see it, as long as the laptop doesn’t die at 20% when the health says the battery should be good, that’s already pretty impressive.