While this dev you encountered might have had no idea what they were doing, a most charitable explanation is that they may subscribe to the idea that the "unit" is a business usecase within a single service (often a 1:1 correspondence with an endpoint, but sometimes even more than one, e.g. a form upload with a separate signed upload step to a 3rd party service).
FWIW the concept of small/medium/large as presented in the Google testing blog is a much more useful denomination.