An absolute path to a file is a full path to the file. It starts from your web server root, continues to your website root, to the file's folder.
Your Joomla files reside on your web server hard drive. Just like your personal files reside on your personal computer hard drive.
In some occasions, it may be you who will need to know a full path to a file of your Joomla site. In others, it might be your Joomla site, your Joomla extension or your web server asking you for a full file path.
For example, very often you may need to download a backup file of your site. To do that, you would need to know a full path to that file.
Or if you are to use the popular Akeeba Backup extension to create backups of your Joomla site. If you prefer to store the site backup in a folder other than offered by default, you will need to enter into Akeba Backup settings the folder absolute path.