This is about the toolchain. The standard Android toolchain uses standard OpenJDK/Oracle JDK Java compiler to compile your app code into standard java class files and then uses dex tool to translate that bytecode into Dalvik/ART DEX bytecode.
Jack toolchain was all about replacing this javac -> dex step with a single fast compiler which would also support more Java 8 features and translate them into DEX format while taking into account feature limitations of ART/Dalvik runtime. The downside was that it didn't support bytecode manipulation tools (tools that work on Java class files before they're translated into dex format) and annotation code generators. Since a lot of good Android libraries rely on annotation generation that was a pretty huge deal breaker.
This news is about Google abandoning the Jack project and retrofitting the improvements and partial Java 8 feature support into current toolchain.