Chloride binding is a complex phenomenon in which the chloride ions bind with hydrated Portland cement (PC) phases via physical and chemical mechanisms. However, the current utilization of clays as (Al)-rich supplementary cementitious materials (SCMs), such as metakaolin (MK), can affect the chloride-binding capacity of these concrete materials. This state-of-the-art review discusses the effect of clay-based SCMs on physical and chemical chloride binding with an emphasis on MK as a high-reactivity clay-based SCM. Furthermore, the potential mechanisms playing a role in physical and chemical binding and the MK effect on the hydrated cement products before and after exposure to chloride ions are discussed. Recent findings have portrayed competing properties of how MK limits the physical chloride-binding capacity of MK-supplemented concrete. The use of MK has been found to increase the calcium silicate hydrates (CSH) content and its aluminum to silicon (Al/Si) ratio, but to reduce the calcium to silicon (Ca/Si) ratio, which reduces the physical chloride-binding capacity of PC-clay blended cements, such as limestone calcined clay cements (LC3). By contrast, the influence of MK on the chemical chloride capacity is significant since it increases the formation of Friedel’s salt due to an increased concentration of Al during the hydration of Portland cement grains. Recent research has found an optimum aluminum to calcium (Al/Ca) ratio range, of approximately 3 to 7, for maximizing the chemical binding of chlorides. This literature review highlights the optimal Al content for maximizing chloride binding, which reveals a theoretical limit for calcined clay addition to supplementary cementitious materials and LC3 formulations. Results show that 5–25% of replacements increase bound chloride; however, with a higher percentage of replacements, fresh and hardened state properties play a more pivotal role. Lastly, the practical application of four binding isotherms is discussed with the Freundlich isotherm found to be the most accurate in predicting the correlation between free and bound chlorides. This review discusses the effects of important cement chemistry parameters, such as cation type, sulfate presence, carbonation, chloride concentration, temperature, and applied electrical fields on the chloride binding of MK-containing concretes—important for the durable formulation of LC3.