Originally it measured a specific dimension on the transistor. Then transistors started shrinking non-uniformly, so they adjusted it -- "how big the transistors would be at equivalent density if they had shrunk evenly". That's an easy thing to play with though, and so you see more and more departures from reality.
The problem is that we've reached a point where not all features scale down evenly. So while some transistors might be 2 nm on a new process, others are largely unchanged from 3 or 5 nm.
How much you get out of a new process is now highly dependent on how you design your chip and what you want it to do.
This is why AMD is using multiple processes in a single CPU package these days. Some elements of their processors get little or no benefit from smaller nodes, so it's cheaper to make them on an older node.
For those not familiar, RHA is the type of armor used circa world-war II. Armor has gotten better on a per-inch-thickness with improved technology. Modern tanks (and modern anti-tank munitions) are often rated as to the equivalent thickness of RHA protection (or penetration) they provide.
For example, Explosive Reactive Armor (ERA) can have a very high RHA rating if you use a traditional HEAT (High-Explosive Anti-Tank) round as your benchmark, but a tandem HEAT round can almost completely eliminate the per-thickness protection advantage that ERA offers. So a tandem HEAT round might have a lower RHA penetration rating than a traditional HEAT round, yet be more effective against an ERA with a very high RHA rating.
So, if you have a spiffy new tandem HEAT round, and want to fake^H^H^H^H present good numbers, you find the highest RHA rated ERA armor that it can penetrate and claim that as the RHA rating of your projectile. Even though it might not be able to penetrate that many inches of actual RHA, or possibly even modern composite armor with such an RHA rating.
Do you think that marketing will drop to pico or zero point whatever nano?
Not Much.