Mash efficiency, sometimes called conversion efficiency, measures only the mash rest itself — how much of a grain's theoretical starch actually got converted to fermentable sugar by the end of the rest, before any sugar is lost to lautering, dead space, or transfer.
Isolating one variable from the bigger efficiency picture
Because it excludes lautering losses, mash efficiency is the number to check first when troubleshooting a low-gravity batch — if mash efficiency itself measures low, the problem lives in crush, mash temperature, mash time, or enzyme activity; if mash efficiency measures fine but the final brewhouse efficiency is still low, the loss is happening downstream, during lautering or transfer instead.
A crush that's too coarse is the most common cause of a shortfall
Insufficiently crushed grain leaves starch locked inside intact husks where mash water and enzymes can't reach it efficiently, which shows up directly as a lower mash efficiency reading regardless of how correct the mash temperature and timing were. A finer crush (within the limits your lautering setup can still handle without sticking) is usually the single biggest lever for improving this number specifically, well before adjusting mash time or temperature to chase a shortfall that a crush adjustment would fix faster.