That's not an instruction you hear too often, but I have certainly used it. I can't speak for others, but when I issue a "when level reduce speed to........" I'm thinking that I don't want to screw with your descent rate, getting you down being more important than speed. If in the case you cite it was me, I would try and make a reference to speed requirements again ("When level" or "Start back on the speed now"). But if I didn't, I would expect you to keep going down to the newly assigned altitude, then reduce.
But you're right, can be a little ambiguous.