It is "chroot jail", and it means that the user is limited to a specific directory.
The user could even be root, but it would not make any sence, since root has access to everything, and easilly could "break out" of the jail.
For example, if you want a user to be "bound" to a specific directory, you would "chroot" that user to the path.
All access to other folders will then be limited to the hard links inside that jail.
(Or soft links, if the specific software allows that)
The actual implementation depends on the software used, and the security differs between implementations.
The biggest problems people have when chrooting an application, is that all links are relative to the chrooted jail.
So, if you are chrooted to "/home/user", links to f.ex. "/var/lib/anything" will be seen as "/home/user/var/lib/anything".
Basically, that specific example could be solved with a hard link from "/var/lib/anything" to "/home/user/var/lib/anything", but as I said, there are many implementations of chroot.