What it means
It avoids terrible fills, but if price races through the limit it may not fill at all, which makes it risky as a stop-loss.
In practice
A stop-limit gives control over the worst price you will accept. Traders use it for breakout entries: buy if price reaches 101, but pay no more than 101.20. If the market jumps past the limit, the order simply waits.
It suits situations where missing the trade is acceptable but a bad fill is not.
What to watch for
For a protective stop the trade-off runs the wrong way. In a fast fall, price can pass straight through the limit, leaving you still in a losing position with no exit working. Most traders use a plain stop order for protection.