I suspect that for most people the reality is that they just anchor and adjust for this kind of question. Typically I'd expect an anchor at about 6-8 out of 10 (few people want to think they're unhappy) and then an adjustment +/- 1-2 depending on whether their current circumstances are better or worse than they think they should expect.

I'd assumed that the vagueness was more of a feature of the question than a bug. If you compare yourself to a billionaire then you will probably rate yourself lower than if you compare yourself to people around you. At the same time, if your instinct is to compare yourself with the billionaire then you probably are less satisfied in life than if you instinctively compare yourself to a more achievable datum. Thus the answer you provide tends to match the underlying reality, if by satisfaction we mean "lack of wishing things were different".

I think the way to make sense of this (And e.g. surveys that ask this question) might be tautological. "It's 0-10 on whatever opaque process I use to answer this question."

This makes the absolute number nearly meaningless, though given human habits you can probably figure out approximate emotional valences of 0, 1-3, 4-5, 6-9, and 10. But depending on how stable the average person's opaque mapping of emotional state to number is, it might still yield really interesting cross-time and cross-population comparisons.