Defining "self-host" so narrowly as meaning that the software has to run on a server in your home closet ensures that it will always remain niche and insignificant. We should encourage anything that's not SaaS: open source non-subscription phone apps, plain old installable software that runs on Windows, cloud apps that can easily be run (and moved) between different hosts, etc.
Anything that prevents lock-in and gives control to the user is what we want.
We can’t have the word lose all meaning either. A cloud app that uses standard protocols and can be moved is still being run on a server you don’t own or control, by someone who could decide to change polices about data collection and privacy at any time. You can leave, but will you be able to migrate before the data is harvested? How would you ever know for sure?
The general definition (although it can be pretty loose) is that you need to control the computer/server your software is running on. If that is a VPS or a server in your basement really doesn't matter all that much in the end when talking about if something is self-hosted or not.
Why doesn't it matter? A VPS is still someone else's computer. They could be monitoring what you're doing on there because they run the hypervisor and they have physical access.
As I said, it's a loose definition, but the same could also be said, if I place a second computer at my parents place for example so I can have an offsite backup. They technically could also be monitoring it and have physical access. I don't think anyone would argue that this isn't self-hosting though.
For me at least self-hosting is mostly about having control of a computer/server software wise, not physically. That is probably an important differentiator from homelabbing, which is more focused on controlling the hardware. You can combine the two, but for self-hosting you don't need to physically control the hardware.
It does include windows installable software. People often start out by running stuff that way (maybe in Docker).
At the very least, it should include colocating your server with somebody else who has better power and connectivity. As long as you have root, it's your server.