The 120 m rule is the open-category height limit: the drone must stay within 120 metres of the closest point of the surface of the earth. The reference is the surface, not the take-off point — flying along a slope, the allowed height follows the terrain.
There is one exception: when overflying an artificial obstacle taller than 105 m, the limit may be raised to 15 m above the obstacle — but only at the request of the entity responsible for it. Geo-zones may also set lower local caps, so always check the zone map before a flight.