What does "Top 10%" mean in edge cases?
Is there any authoritative legal information on this?

I am not aware of any jurisdiction in which applying for a stipend for which you are not eligible is illegal. For obvious reasons, eligibility is bindingly determined by the stipend giver, not by the applicants.
The rule &quot;top 10%&quot; does not seem to be stated clearly. If the students that got 1.2 in your class are included, then the statement

12.5% of the students in the class are in the top 10%

would be true, which seems to be a contradiction. If, as Nuclear Wang proposes, the students with 1.2 are not included in the 10%, then the statement

Only 5.5% of the students in the class are in the top 10%

would be true, which also seems a contradiction. As both plausible interpretations lead to apparent contradictions, it is reasonable to have doubts about the actual meaning of the rule. So if the rule is not stated more clearly, just apply and let the stipend givers decide. That is their job, not yours (or your friend's).