DDR3L 4gb chip installed, but only 512mb used. Why?

When I look up the ram chip used with the BBB I see that its a 4gb chip instead of the expected 512meg.
Why is a 4gb chip used?
Is the remaining space used for partitioning the O/S or something?

If I wanted to replace the chip with something similar what problems should I expect?

this was covered in a really recent thread here. it’s the difference between big B and little b which people are often sloppy about. b represents bits, B represents bytes. since a Byte is by definition 8 bits, there is an 8:1 difference, thus 4Gb = 512MB.