It's a joke. Lossy compression can only work with specific formats where information loss is acceptable, theoretically anything but in practice usually audio and video.
If gzip tried to do lossy compression, not knowing what the data is, it would have to randomly corrupt data.
There are plent of example texts where letters are deliberately left out to show how the brain fills in the missing data without losing meaning. Seems like this --lossy option might not be so bad after all. Might only work well for those that speak the language natively.
If gzip tried to do lossy compression, not knowing what the data is, it would have to randomly corrupt data.