Foglight reports a pool as degraded when any of the LUNs in the pool is reported as degraded. This is usually the result of one or more disks in the backing RAID pool going offline.
The '4' state in the rule is just a numeric representation of 'degraded'.
The general policy in FSM is that the "degraded" state bubbles up specifically under the below circumstances:
disk down/degraded -> raid pool becomes degraded
raid pool degraded -> LUNs using that pool become degraded
LUNs degraded -> storage pools containing those LUNs become degraded
This can be summarized as "An item is considered degraded if one or more contained items are degraded".