It just means what the title of the thread says: chop until you are 1 turn from actually chopping the forest down then stop chopping.
This lets you control when you actually finish the chop and get the production bonus. For example: If you pre-chop 3 forests around some city, you can later finish all 3 chops in 3 turns with 1 worker which might be good for rushing a wonder you want, once you get the tech for it.
I suspect the main reason for pre-chopping is the tech tree. Different things are available at different times and pre-chopping lets you prepare ahead of time, so you can much more quickly "chop rush" something as soon as it becomes available.
On the other hand, I never turn the stupid thing on (and if it starts turned on, I turn it off). It messes up queued orders. Say I tell a worker, via a series of queued up actions, to go to some silk, build a plantation, build a road to connect the resource, then go somewhere else to do something else. With pre-chop turned on I get no plantation (and therefore no silk) because it stops one turn short of completion since there happens to be a forest on the silk, so some number of turns later when I notice that one or more of my cities are actually unhappy when they should not be, since the silk was never hooked up, I have to waste my time sending some other worker over there to spend 1 turn finishing the plantation (after losing a population point's worth of food/production/commerce/whatever due to the unhappy population for some number of turns in each affected city, which is also an annoying waste that should not have happened). I greatly prefer if my workers actually do what I tell them to do. Therefore, even when the option is available, if I want to pre-chop I do it manually (which I rarely do since it is not actually very useful - on average it is certainly less than once per game that I bother with it).