Bypass refers to allowing a signal to pass through a device without affecting (processing) the signal, i.e., “dry“. The signal is, however, affected by any input buffers, which can impart a character or slightly degrade the signal. This differs from true bypass, as true bypass allows the signal to effectively be hardwired to the output when the effect isn’t engaged.
It’s a tradeoff, though. A device that bypasses rather than “true” bypasses does have some advantages, since the buffers act as input amplifiers, which allow for longer cable runs and reduce the effects of loading when ganging devices such as guitar pedals together. The downside is that even when the effect isn’t engaged (when it’s “bypassed”), the tone may still be slightly altered by passing through the buffer stage.