The destinations include some territories like Puerto Rico which aren't passport issuers, but which have visa requirements which may differ from their parent country.

In practice, this means the index assigns more weight to passports accepted by nations with many island territories - like the United States.

Some parts of countries have different travel restrictions than others, for example, Greenland is not part of Schengen.

This could be one of those "falsehoods programmers believe about ..."

Colonialism? Take the Falkland Islands as a small example. Ever since the British won the war in 1983 all inhabitants were automatically granted British Citizenship, hence no need for a separate passport.

Just guessing, but could be some colonies with some special travel rules. Eg. some islands somewhere in the middle of nowhere are technically part of eg. France, people living there have french passports, but schengen visas might not be valid to travel there.

Some destinations don't have passports. But all passport issuing places are in principle visitable.

Puerto Rico, for example, counts as a destination but Puerto Ricans have US passports.

I'd imagine it's stuff like UK vs the various british islands