Right now, it is not part of the Linux kernel. It is just some random external software that you have you download and compile yourself against the source headers of the kernel you're currently running.

It got merged into the net-next tree, which meant it has been approved by the maintainer of the Linux kernel net branch to be included into the kernel. Linus has now pulled it from net-next into his own tree, which means it'll be included in the next release of the Linux kernel.

As far as that means as an end user, it means that you no longer need to recompile your wireguard module every time there's a kernel update, as now it will be handled by your distro.

That said, given that Wireguard is packaged nicely already for most distros, the end effect for you is really pretty little, as you're probably unaware of all of this complexity that's going on right now, as it mostly just works.

It will now end up in all Linux distros by default. Instead of having to chase it down and apply a bunch of patches it’s now just a single config option away.

Not all linux kernel modules are in the main sources. Many projects begin outside the main tree and are pulled in later after they have proven themselves and have matured, responded to criticism, etc.

Right now Wireguard is using DKMS which is like a external Kernel module which needs to be rebuild on every Kernel update. When WG is already inside the Kernel no dynamic created DKMS are needed anymore.