Yes. this is mainly regarding the entire network size, which, shall be more accurate with more estimated data collected and averaged.
The peer connected could be referred to:
the historic accumulated peers that connected to the node
OR
the current peers that the node is keeping the connection to
If the former, as it is a historic accumulated statistics, so in theory, it will be higher than the entire network size in long run.
If the latter, it could be something wrong, as the chance that current connected peers higher than the entire network size shall be very rare, as the estimation error shall not be that huge.