Hullin, Chapter Four, Mishnah Six
Our mishnah talks about two different subjects: 1) the status as a terefah an animal whose leg has been broken off; 2) a limb hanging from an animal and whether it is considered to still be part of the animal.
1) If the hind legs of an animal were cut off below the joint, it is permitted;
a) If above the joint, it is terefah.
2) So too if the juncture of the tendons was gone, [it is terefah].
3) If the bone was broken but the greater part of the flesh [around the fracture] remained, it is rendered clean by the slaughtering;
a) Otherwise it is not rendered clean by the slaughtering.
Section one: According to the rabbis there are three parts to an animals leg. The lowest part is the foot, the middle part is the calf and the upper part is the thigh. The place where the foot is attached to the calf and the place where the calf is attached to the thigh are both called berech which in modern Hebrew means knee. In the Talmud they debate which joint is the joint mentioned here. If it is the upper one, then it would mean that an animal whose leg has been severed below the knee (what we call the knee) is not a terefah. If it is the lower one, then only if it is severed below the place where the foot joins the calf is it not a terefah.
Section two: The juncture of the tendons refers to the tendons that connect the thigh to the knee. If these are missing, the animal is a terefah even if the bone is still whole.
Section three: A limb that was separated from the animal when the animal was still alive cannot be rendered clean by slaughtering the animal. A broken bone does not mean that the limb must be considered separate. As long as most of the flesh remains, the limb is part of the animal and when the animal is slaughtered, the limb is permitted and clean. But if most of the flesh does not remain, then the limb is not considered as part of the animal and the limb is unclean even after the animal is slaughtered.