[kazinator]

It means that suppose the attacker can look in /etc/shadow (due to having root privs) and sees, in plain text, that the password of user "bob" is "correct-horse" (not anything fancy like "correct-battery-horse-staple"). But Bob doesn't use that password anywhere else. So what good is that piece of information to the attacker? On this system, attacker can just "su bob". On systems where attacker is not root, "correct-horse" doesn't get into bob's account.