It is a legal term with a scope that varies by Jurisdiction and type of agreement. For rentals, another way to say it is an implied warranty of habitability. Reasonable surrounding volume is a part of it, but its a very Jurisdiction and fact specific matter, and also covers things like working plumbing and electricity, the right to exclude others from your rented space, that no one else is also renting and using that space, and basic cleanliness of space controlled by the landlord.

Where it has absolutely nothing to do with volume or noise is in real property purchases. Real property comes with a covenant of quiet enjoyment if the seller is promising that there aren't any claims against the property, no disputed ownership of it, no liens, etc. You could sell a house stuck between a rooster farm and an open air flashbang grenade testing facility and have it still meet the requirements for a covenant of quiet enjoyment

It can include quiet in the literal sense, but it includes many different things relating to calm/peace rather than to noise. And exactly how much literal quiet it means is not black and white.