It means the field is completely locked and cannot be edited. Users would only be able to see any existing values in the field, but not add/select data. You can set which fields are read-only and which ones are editable so that users only update specific fields (that you choose to make editable). For example, allowing users to upload a file, but not edit any other field data.
How does it work for linked records fields?
In almost all cases, setting a field to read-only on your form is self-explanatory. It's a straightforward function. However, linked records fields are special. We explain it in this article.