refers to the section modulus of the entire shape taken about the axis of bending, with respect to the extreme fiber that is in compression. For example, the value of Sx published for angles in Table 1-7 of the Manual represents the smaller Sx for the shape. If the leg tip closest to the x-axis is in compression, the value of Sxc would be larger.
If the entire leg of the angle is in compression, the toe of that leg is also in compression. That would be the leg in compression due to flexture about the geometric axis of an equal leg angle. If the angle has unequal legs, the 0.8 simplification method does not apply; the provisions for principal-axis bending would apply instead.