The phrasing is, at best, ambiguous in English. Either 1) he had a half baguette and he ate the whole thing, or 2) he had a whole baguette and ate half of it. Either one is a possible interpretation, and without more context and with this exact English phrase, I would assume case 2.
If indeed case 2 is intended (he ate one half of the whole baguette that he had), could one not say in French, "Il a mangé une moitié d'une baguette."? The lesson has these examples that seem like the same situation and use moitié : J'ai bu la moitié de la bouteille and Il ne mange qu'une moitié du biscuit.
The lesson also says: "Depending on context, Un/une demi-[nom] can either refer to half a full-sized item (i.e. bucket) or to one of these half-sized items . . . but you use demi- in both cases." That seems to say that demi-baguette would be correct even if he ate half of the full-sized one he had, but I don't understand why une moitié would not also work. What is the difference between the baguette and the bouteille ("J'ai bu la moitié de la bouteille ")?
Merci!