It means to give benefits to old users that you have stopped giving to new users. For instance if your online service is completely free and then you restrict certain features for new users, you might grandfather old users into the premium plan to keep them happy (since it was free for them initially)
I am a grandfather and I am involved already more than 35 years in the technologies' developments. I studied electronic lamps and now I am involved in projects with wifi, lifi, Bluetooth controls. I know how it went, I witnessed it. Youngsters are coming now and think, that the world is just created. Sadly for them, it is not. It is enough mature for grandfathers to be in.
all the best