The core loop is the smallest engagement loop in the game, where the player goes through it inside a single session, and reaches some kind of a stopping point, but also wants to come back and go through it all over again (right away, or next time). It can be the smallest loop, maybe, sometimes, but usually isn't.
For example, in this article, they focus on the loop "player returns the ball <-> opponent returns the ball". This is the smallest loop for sure.
But the core loop here is on the point level: "Someone serves, players exchange the ball back and forth, someone finally misses, the other person scores points. Repeat." Or maybe game or set level, for more advanced players who are no longer challenged by point play.
Similarly in a racing game: the core loop would be a race, not a single lap, or a single pass of an opponent's car. Or in an RPG: hitting the enemy and having the enemy hit you is a tiny loop, but it's not the core loop: doing a quest and coming back for a reward is much closer to what we're looking for in a core loop.