Cut means "if you matched this far, don't consider other options even if the current option fails to parse".

With this grammar:

    expr: expr '+' term | term

And this input:

    5 +

It will first consider the first alternative (expr '+' term) but will fail to match that branch because it's missing the "term" after the "+". That's fine because there's another alternative to try (term). That alternative doesn't match either, and you'll get the error message from the last alternative that it tried (probably something like "unexpected +").

But with this grammar:

    expr: expr '+' <cut> term | term

Then with the same input ("5 +") it will consider the first alternative, fail to match, and then fail immediately with the error message from that first alternative (something like "missing term after +").