What is a circumscribed thyroid nodule exactly?

It depends: Circumscribed, on an ultrasound report, describes how distinct the border is between the nodule and the normal thyroid tissue. It would usually be preceded by "well" for nodules with sharp outlines, or "poorly" for nodules with blurred outlines.

Border around nodule: 'circumscribed' defines how sharp the border is around the nodule which is suggestive of benign vs cancerous nodule. If nodule is well-circumscribed, it can be benign or cancerous, but more likely benign. If a nodule is poorly circumscribed, it's more likely to be cancerous.