There’s no guide, you are free to choose whatever works best for you. In my opinion (and many others) is it is best to mark it known when you understand the word in context. I have a couple of reasons for this.
First is that LingQ is really primarily an input based learning platform…it doesn’t make a lot of sense to try and gauge whether you can use the work in spoken output.
Second…trying to gauge whether you can output the word slows things down. You have to somehow decide if you can use it in output. You’ll find this probably isn’t as easy to gauge as you think, but the answer probably is…probably not anyway.
Third. It will take a LONG time for most words to become part of your active vocabulary. You screen will be a wall of yellow for a long time. Your active vocabulary is going to be much smaller than your passive vocabulary so it will stay yellow for a long time. I think marking it known when you know the word in context gives you a bit of candy so to speak for your hard work and you can really see the progress your making as your known words climb. If you measured it based on whether you can use the word actively, your known words will go up very slowly in a very discouraging way.
Fourth. It’s easy and quick. If you recognize the word in context, bam. Set it to known. Easy peasy. No thought needed. You can spend more time reading and listening and less time trying to decide what level of known or whether you do know the word or not.
If you come across the word again in a different context, you can set it back to unknown. Very easy.