This checkpoint doesn't seem particularly vague. The checkpoint appears to apply to everything. Nothing should be more than 3 clicks from your home page. And no group should have more than 10 items. It is usually impossible to satisfy both of these for a complex site.
Most sites organize states geographically.
It will be hard to define a hard rule. But I know it when I see it. This decision must be based on professional judgment. In the User Agent guidelines, we had a similar issue with the time on refreshes and pauses. If you choose any number, it will be arbitrary.