That entry is for "Not in battle".
Cards in the current battle are "in battle".
Cards in territories, set-aside areas, and LoRs are "not in battle".
Everything else is neither.
Is that entry from during battle?
If not how can your hand and deck be in battle when you are not in battle phase and no battle is taking place.
The implication is that “cards not in battle” refers to cards that are in play.
Since neither your hand nor deck are cards in play, they would not be included as cards “not in battle” either.
Not cards in play, exactly, more like on the table/board.