It indicates some approval but suggests there's room for improvement or excellence hasn't been reached. Your essay was not bad, perhaps with a bit more research it could be great.
Pro Tip 2/3
Calm Enthusiasm
Expresses a composed, rather than overly excited, form of admiration or satisfaction. The weather today is not bad at all for a picnic.
Pro Tip 3/3
Humble Reaction
Often used to modestly accept a compliment without appearing arrogant. Thanks! I think my baking is not bad.