The problem with that statement is variance in taste, education, and ambiguity in the real world. Stephen King is making the classic mistake of an introvert projecting a blanket statement based on the mistaken pretense of a uniform vocabulary. There is no such thing. Average Americans have a vocab is about ~43k words, but they aren't the same subset of words or the same number. Furthermore, the vocabular size of the individual is variable up to a 99.99% confidence upper limit that stretches to around 200k.

Although it's fairly certain most Americans won't understand "cyberdisinhibitionism", "consanguineous", "antidisestablishmentarianism", or "insouciance" without additional context, some people's "~50k innate concepts" can receive an adjuvant through performative, logorrheic elucidation. The idiom "a word to the wise" implies the property that sharper instruments require less explanation to make the connection, while most others need a little more assistance.

And there are multilingual people who engage in loaning and coining words. Furthermore, the question of counting colloquialisms like "hangry" muddies the water.

So there is no clever rule except to write to the anticipated audience be it a PhD dissertation in cosmology, an article for "The Atlantic", or a children's bedtime stories for 8-year-olds.