It's a loose guideline but you shouldn't read too far into it. Besides muscle mass, it also ignores things like skeletal structure and density. It's a good way to quickly determine whether someone is close to a healthy weight, but lots of people are in gray areas where the BMI says they're slightly under or over healthy weight but they're actually fine.

Your weight also isn't necessarily a good indicator of health. You can be at a healthy weight but have tons of other issues, and you can (rarely, admittedly) be at an unhealthy weight but be totally fine.