"Bankfull" indicates the height (or stage) of the stream that just fills the stream channel. Any additional water would begin to more rapidly widen the stream and might lead to water overflowing out into whatever floodplain exists.
It is when the water is at bankfull height that the work and changes that determine stream channel stability occur.
"Bankfull" stage is not the same thing as the "Top of Bank" stage. For the mathematically inclined, bankfull is the inflection point of the curve described by a cross section of the bank.