I think it's referring to the idea that LGBTQ+ rights only ever exist in the legal realm as opposed to the material.

"Oh, you can get married finally but we won't do anything to fix the horrific material conditions you live in. " A trans person has the legal right to join the military but not to use the fucking public bathroom or affordable HRT. It's like how segregation based on race was made illegal but yet schools today are more segregated than ever.

Like, economic democracy and working-class proletarian power, where the socio-politico-economic base is transformed into a socialist base.

The main focus of queer rights campaigning in the post-AIDS years where marriage equality and being allowed in military service, and the common non-assimilationist-but-still-within-the-liberal-framework criticism of that was that campaigns should have focussed more on protection from discrimination in employment and housing. That's traditionally the spectrum of approaches focussing on legal rights. Nowadays, you can also add legal rights like access to (but not coverage of) trans healthcare, self ID laws, trans women being allowed to compete in women's leagues or bathroom access (but no free public bathrooms).

A material approach would be employment, housing, education and healthcare guarantees. These aren't even strictly LGBTQIA+ specific, it's a core part of already existing socialism that everybody gets these, but queer people are often much more likely to be reliant on such guarantees of material rights than straight people - think of queer kids being kicked out of their home by homo- or transphobic parents and having to live on the street; think of discrimination in the workplace and housing market where, even if it is illegal, you need to be able to afford better lawyers than a potential boss or landlord to assert your rights; think of the cost of trans healthcare and how few trans people in the US can get stuff like bottom surgery. Queer people, especially those who aren't male, cis, monosexual, binary, and endosexual, especially if they are also PoC and / or immigrants and live with disabilities, are a lot more likely to be materially marginalized.

A socialist, intersectional approach towards queer rights recognizes this precarity and uses the justified anger of queer people for radicalization, turning queerness into a part of vanguardism.

A liberal approach instead offers limited legal protection in exchange for assimilationist fealty to the patriarchal, cishetnormative, binarist system.