To the above Cheerios example:
Of course Professional Grade Cheerios would be referencing that a chef in a restaurant would be using these Cheerios, instead of your regular household Cheerios. The term "professional grade" in this case would imply a benefit to the professional that makes it a superior choice to the regular grade.
Comments above made on durability or higher quality are incorrect. Any benefit over other products can give something the label of "professional grade". For example, "professional grade" could mean it contains more sugar or is slightly sweeter than the regular grade products, making its patrons happier.
The legal aspects of calling something professional grade in terms of false advertising is that the product must be compared to industry household standard. Therefore, if a company uses this term and are sued, the producers may have to prove that their product is somehow superior to the household standard.
For example: A glue company calls their super strong glue professional grade.
At work, their glue fails and someone is killed. And they are sued.
To get out of the suit they could simply state that they used the label "professional grade" because their glue is stronger than white glue, or that it is easier to clean up, or any other benefit over white glue.