It’s an economic concept where the value of one extra unit increase diminishes as you get more and more of that thing. For example, doubling your salary will have a large positive impact on your quality of life if you have a very low salary, but will have no or minimal effect if you are already well off.
This concept can be applied to other things as well: If you want to stay healthy, going from 0 to 3 workouts/week is going to have a big impact, but going from 3 to 6 less so.
However, one area where the opposite is true is personal knowledge management , because The value of a linked database of notes builds up over time since you will have more and more things to link to with a mature note-taking system. So I think becoming a real expert in a subject is more like Compound growth rather than diminishing returns.