That was my understanding of the term as well.Judging by his comment it seems that he's referring to "proofing down".
Spirits off the still are pretty stiff (up to 80% ABV off a pot still, 90+ off a
reflux column). They're "proofed down" with distilled water, and in the case
of whiskey's, rums, and other spirits aged on wood, they're still around
60+ ABV as they're going in the cask (cask strength). Once aged on wood
they'll be proofed down further to 40% usually.