Looking at the second paragraph of page 120 [...]
[Muons] decay [...] with a half-life $\tau \approx 2 \times 10^{-6}~\text{s}$. Muons are created when cosmic rays hit the atmosphere, and subsequently rain down on Earth. Yet to make it down to sea level, it takes about $t \approx 7 \times 10^{-6}~\text{s}$ [...] the muons are travelling at a speed $v \approx 0.99~\text{c}$, giving $\gamma~\approx~10$. From the muon's perspective, the journey only takes $t' = t / \gamma \approx 7 \times 10^{-6}~\text{s}$
Is the half-life given [...]
The value $2 \times 10^{-6}~\text{s}$ is actually both fairly close to the known mean life duration (or for short: the "mean life") of muons, which has been measured as $\tau \approx 2.197 \times 10^{-6}~\text{s}$,
and also fairly close to the corresponding half-life $\approx~\text{Ln}[~2~] \times 2.197 \times 10^{-6}~\text{s} \approx 1.523 \times~10^{-6}~\text{s}$.
measured in the rest frame of the muon?
The mean life duration (and correspondingly the half-life) is of course a mean values of a sample of many individual life duration values of individual muons; in recent practice a sample of billions of individual values; cmp http://muon.npl.washington.edu/exp/MuLan/TalksAndPresentations/MuLan2004_PRL_Submit.pdf
In order to meaningfully compare these individual values, and put them in relation to each other (such as to determine their mean value) it is not required that all these individual muons had been members of one common rest frame. (Although, of course the comparison is simplified if they are, in practice, at least approximately.)
Indeed, in order to compare the life duration of any one muon to the duration of $1~\text{second}$ (or to the duration of some particular number of oscillation periods of certain ceasium atoms), or in order to compare the individual life duration values of any two muons to each other, it is not even necessary that any one muon had been a member of a rest frame. Surely muons circlating in a storage ring can be individually attributed a life duration value, too.
What can be said is that the life duration value of an individual muon is attributed specificly to this muon, as its duration from having indicated its production until having indicated its decay; it characterizes this muon properly.
Am I right in thinking it would be clearer if $\tau$ was labelled $\tau'$ in the text instead
If the prime ($'$) is supposed to denote quantities which are properly attributed to the muon (rather than, say, to constituent of the atmosphere, or to constituent of the Earth's surface) then: yes.