Member countries are the countries in which the freelancers on an agency's roster are based, as shown on each member's own profile, as distinct from the single country the agency itself declares.
Every freelancer account carries a verified country, and when a freelancer joins an agency that country travels with them onto the agency's team list. An agency with ten members across four countries is therefore a four-country agency to anyone who reads the roster, and a one-country agency to anyone who reads only the card, which shows the agency country the owner set. Upwork's agency page shows the members that have public profiles, so a client can usually see where the team is, and some agencies describe their footprint in the overview.
Where the members are decides most of what a client experiences: the hours in which questions get answered, the language the daily work happens in, holidays, and which laws apply to the people doing the work. It also explains some patterns in the directory, such as agencies registered in the United States or the United Kingdom whose developers are in South Asia or Eastern Europe, which is a normal business structure and not a concealment, so long as the profiles say so. The thing to check before contracting is that the people named on the proposal are the people on the roster, and where they are.
How Upwork Insights uses it
The index ranks and maps agencies by the agency's own country, so the 8,174 agencies on the India page are agencies that declare India, whatever their members' countries. Member countries are read from the agency's public page when Upwork shows them and kept with the record, but no ranking or page is built from them.