What does RCE mean?

RCE stands for Remote Code Execution: being able to trigger arbitrary code execution (ACE) from a remote machine.

This, however, is mislabelled: it’s not remote code execution at all, only local. It would only become RCE if there was some path to remotely triggering Vim to open the attack file, or Emacs the attack repository, or if a normal way of fetching a repository automatically set up and executed the hook.

Remote Code Execution, which this isn't, in both cases.

It is code execution.

Remote code execution - aka they can run arbitrary code on the compromised machine via the bug.

Basically the worst possible thing.