I notice Google confusingly points you back here to a 2009 query.
I'd say that "System Binaries" are machine executable files and libraries as against Source Code which is human readable and requires to be compiled to produce the machine runnable "System Binary".
To simplify, in Windows world, executable files have the identifier .exe, in Linux/Unix world they're .bin.
(Lets not confuse the issue with library files, OK?)
It's actually a bit more complicated than that but does that give you an understanding?