Genealogically, it means a family tree which is not a binary tree [1]. The measure is meaningful over a certain number of generations. Everyone is inbred over infinite generations, assuming a universal common ancestor. That doesn't sap the term of meaning.
Medically, we look at the coefficient of coancestry [2].
Practically, I think we trace back 3 to 4 generations, my source being grandparents (2) is a common word, great grandparents (3) less so but widely understood, and great great grandparents (4) being something few people keep track of.
[1] https://en.wikipedia.org/wiki/Binary_tree
[2]https://link.springer.com/referenceworkentry/10.1007/978-1-4...
What next, we can defend "tall" being anywhere from 1mm to 9 feet because height is a continuum?
Words have meaning so they can be used for communication. If I use the word inbred to mean two siblings having a child and two partners sharing an ancestor 20 generations back, I'm not communicating anything when I use the word inbred.
And pointing out that closeness of ancestry is a continuum is not a defense of using that word in that manner.