This is an employment to population ratio, so 1 in 4 people, ages 25-54 do not work. That does not mean that they are unemployed! Unemployed people are those looking for work that don't have employment. Plenty of people voluntarily leave the "labor force" (employed + unemployed people), such as stay-at-home parents, trust fund kids, or independently wealthy and retired folks.
That said, "unemployment" is a very tough figure to calculate (as are most macroeconomic figures), and there's a lot of pseudo-controversy about what the numbers mean. Wiki does a good job summarizing how the BLS calculates unemployment [1].
It does mean that they are unemployed. Merriam-Webster defines unemployment as "the state of not having a job". Its very binary: you either have a job or you don't.
You have mistaken bureaucratic doublespeak for English. I think it clear we are speaking in standard international English here. Letting the US government redefine words such as "unemployment" to mean something other than "the state of not having a job" is something straight out of a dystopian novel.
That said, "unemployment" is a very tough figure to calculate (as are most macroeconomic figures), and there's a lot of pseudo-controversy about what the numbers mean. Wiki does a good job summarizing how the BLS calculates unemployment [1].
[1]: https://en.wikipedia.org/wiki/Unemployment#United_States_Bur...