That is using gear obtained by other character / traded for. It is opposed to untwinked in which you'll play with gear you only found with that char. I think it also refers to optimized stat and skillpoint allocation.
Yeah, I wasn't sure either. But reserving skillpoints for higher level skills and not using them right away is sort of twinking too, isn't it? Ah well, maybe not doing it is a hardcore version of untwinked, rather than the other way around.