It is not. Vocabulary is far from the binary of "you know this word or you don't". At a minimum, it is usually split into passive and active vocabulary, with passive being the words you understand when encountered, and active being the words you can use effectively. Wikipedia's entry is a pretty good overview.

It is more like an ability to recognize the word when it is used in context.

I got ~1/3 that is very generous estimate even for "recall" case (recognize), and it obviously false for the "generate" case (using in speech) where I guess my vocabulary is likely ~1/90 of all English words.

No, absolutely not, and that's my point. A real test would be having to type the definition, or pick from ten options