In the past it meant you were unable to even boot the install media, these days it often means something might boot but ends up stuck because it can't initialize for example input devices so you can't load extra driver - which you first need. For every OS you want to boot.

EDIT: In fact, I have a funny example. On my laptop, out of laziness, vendor didn't include necessary ACPI data for sound to work properly.

Why?

Because for windows they could just ship a minimal INF file that declared a "driver" for the speakers which was actually just collection of parameters for a generic driver. As we say in Poland, "finished, time for Counter Strike".

On Linux working sound required patching drivers to include potentially dangerous settings as "quirks", including things like capacitance of capacitors connected to amplifiers.