I'd assumed it means the range circle within which stored oxygen will last in the event of a pressurisation failure, allowing one to continue to fly at altitude - - but that can't be right - isn't SOP to descent to a safe altitude to avoid hypoxia?
Chart/circle specifics will depend on the operator but they are quite possibly calculated on the basis that do that you
do descend.
Certainly for ETOPS purposes our range circles, equal time points and fuel planning are calculated (amongst other things) on the assumption that for a decompression we will perform an immediate descent from the cruise to much a lower altitude as detailed in the QRH, typically FL140/FL150.
As an example if we're over the Atlantic and inside the ETOPS "circle" for say Keflavik (and we always have to inside a circle for somewhere) in the event of a decompression we know we can
immediately descend to whatever the altitude the checklist requires, and then fly onwards to KEF and arrive there with at least legal fuel reserves. If we're well inside the circle when things go pop we may well be able to decend to an even more comfortable level enroute to the diversion destination.