4.17mm is the height from the top of the mainboard base just under the M.2 slot to the top of the cooler, which seems to be the tallest component on the mainboard. As you see in the photo, the cooler is very close to the slot area, so even if the top cover is designed with a slight bow, there would be little change to that dimension. Anything taller than this will almost certainly contact and push against the bottom of the top cover containing the keyboard and trackpad.
This measurement must accommodate the M.2 and any heatsink. In my case, the top of my M.2 was 3.39mm from the mainboard base, leaving only 0.78mm of clearance for a heatsink. I did not feel comfortable using a 0.5mm thermal pad plus a 1mm thin copper heatspreader here. Others did and report it works for them, so there’s a little more clearance than 4.17mm - but not much! I’d be surprised if there was over 5mm.