I generally split 'quality' into three parts: design quality, construction quality, and the quality of the company.
As an engineer, the quality of the design is important to me. I want to see the all-important 'elegant simplicity.' As the complexity of a design increases, so does the likelyhood of failure. And even if the more complex design is somehow not more prone to failure (occasionally happens), I will still lean towards the simpler design. That isn't to say that all designs should be as simple as possible; elegant simplicity refers to making a design as simple as can be, while still properly accomplishing the task at hand. Removing the washers from a folder does simplify the design, but it sacrifices smoothness of opening, so it doesn't qualify. A frame lock (integral lock, monolock, whatever) is an example of an elegantly simple design; it accomplishes the task of locking the knife, while reducing the number of parts by combining the handle and lock (a single part doing multiple jobs is a good indicator of good design).
Compared to that, construction quality is pretty simple. Fit and finish. Are the tolerances good, are the finishes on various parts good, etc., etc., etc.
Quality of the company refers both to a company's reputation for standing by its products, the likelyhood that the company will survive to continue standing by its products, and the 'fairness' of its practices. Fairness means that the company doesn't falsely represent the quality, performance, or anything else, of its products. Fairness means that the company does not use deceptive sales practices like holding back product to build demand. Fairness means that the company doesn't steal the designs of others or act negatively (rather than saying "we're better than xyz," saying "xyz is really bad" or something else like that).
Quality isn't a simple term to define, in my opinion, as it seems to vary from person to person. The above is what I think of when I use the term, anyway. Hope this helps.