It still means biological chronicle in-story, more or less. The Legends of the Bionicle were the stories the Turaga told relating to Mata Nui’s slumber and salvation by the Toa. AKA, the CHRONICLE of Mata Nui’s BIOLOGICAL processes fighting back against the Makuta virus. Get it?
The reason this is such a point of confusion is that the whole idea of legends and myths was already long gone by the time they actually revealed Mata Nui in 2008 and could have, potentially, made more clear the meaning of the line’s name. As it stands, the only place the I’ve found that specifically refers to the original meaning of “Bionicle” is here, and of course even if you read this in 2001 the “biological” part would still make 0 sense: