Did Adam and Eve understand death? What did death mean to them? This answer says that the serpent convinced Eve to eat the apple to avoid death by saying "surely not die".

Since they are described as the first people that existed, what could death mean to them?
Every recorded interaction that Adam and Eve had in Genesis portrays them as active, reasoning adults, so there is no particular reason to assume they had less than normal intelligence. That said, there had been no killing in the garden, so Adam would not have had any first hand knowledge, that is true. (Unless if you want to get into the apocraphyal story of Lillith, but that's a whole other story!)

What Adam probably would have understood, however, is the concept of alive and not alive. He was alive before Eve, and while he wasn't awake for it, probably understood ru'ach - breath inside of Eve animating her.  

The idea of not having breath, of being inanimate, probably would have made sense, because Adam in naming the animals, would have understood what is not animal, and therefore what is not alive. 

What became clear, upon The sin, was the new way in which God was no longer felt. Being scared of God led Adam and Eve to cover up after the fall- so if they didn't know what death was, they learned quickly. 

What is strange about the question, however, is the implicit understanding that if Adam and Eve didn't know what death was, then the punishment should not necessarily have been a deterrent.  That postulate itself is questionable, however. An understanding of the consequences is not necessarily a prerequisite for obedience. 

If I tell my kids, "you had better do so and so, or else you will be in trouble," is sufficient reason alone to do what I say. Punishments are equally valid even when they only teach lessons after the fact. 

That Adam and Eve Died to God that day taught them that God must be obeyed. A lack of understanding of the consequences is not a justifiable defense.