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I was using 'ee.Algorithms.Landsat.simpleComposite' to composite images, but I'm not sure what does this 'percentile' parameter mean?

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Take a look here (Landsat Algorithms). Look at the Simple Composition section, which describes the default parameters for the ee.Algorithms.Landsat.simpleComposite algorithm:

... This method selects a subset of scenes at each location, converts to TOA reflectance, applies the simple cloud score and takes the median of the least cloudy pixels ....

The median is the 50th percentile in a distribution, which means that 50% of all available observations are greater than it and 50% are beneath it. So the algorithm takes the least cloudy pixels from a set of images and assign to the composite image the pixel value which is the 50th percentile (the median) of least cloudy pixels.

The percentile parameter means you can use other threshold than the median. For example, percentile 75th is the value where 75% of all observations have values smaller than it.

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