This refers to the "act" of cutting a bevel along the entire hip rafter so that the "plane" of the roof as viewed from the common rafters would go over the hip rafter. If you did not drop or bevel the hip, the sheathing would "hit" the part of the hip that stands proud of this plane. This would also cause a "bump" at the hip and could interfere with the roofing going on the roof. See how to calculate the bevel for a regular hip rafter.