Its one of those "you'll know it when you see it" things. In my pool, a 20x40 IG vinyl with an 8 1/2 ft deep end, the water is normally very clear and "sparkles". You can see sunlight clearly reflected off the bottom and the main drains and all look very clear and "crisp".

When the water gets "cloudy", even slightly, it looks just a bit murky. You can see the drains at the bottom, but they aren't sharp. The reflections of light off the bottom are not crisp. Very often, you can't really see anything in the water and it generally looks clean and clear, but just not as sharp. Fortunately, this doesn't happen often (but it just did a few days ago when I inadvertantly shut off my SWG and spent the next 2 days trying to figure out why my water was cloudy with a lower CL level than expected).

"Cloudy" water almost always corresponds to some change in the water. Your numbers may be good, but how do they compare to when the water "sparkles"? That is really what is important. In my case, the CL had dropped from my normal 4-5 ppm to around 2 and the water was just slightly cloudy. I think overall, people use it as a good guage of when their pool is on the edge of a problem and needs attention.