What does "percentile' mean in this recommendation portal?
Lower is definitely better. For example, the "Common Application" which is used for applying to undergraduate schools is pretty clear that 1% is good.



The same generally holds for graduate school applications.

You should ask the recommender to try to change it and, if she is unable, she should contact the admissions committee directly. A top 50 percent ranking will almost surely lead to you not being accepted.

If your reference writer is so unfamiliar with the US system, you may want to consider asking someone else. There is an art to writing good recommendation letters. For example, it is reasonable for a recommender to rate the "intellect", "communication ability", etc. as being top 1% even if the student is ranked 2/60 since there is a difference between class rank and "intellect", "communication ability", etc. In fact, differentiating between the two is the whole point of the recommendation letter.

If the recommender is unable to change the letter at this point, it is much better to put in a phone call/email to the chair of graduate admissions than a phone call/letter to the university. In my experience the central administration is useless and you need to get to whoever is actually looking at the applications. It is critical that the recommender, and not the applicant, makes this call/email.