The term usually refers to an author who has published with a traditional trade publisher such as one of the Big 5 (Penguin Random House, Hachette, Simon & Schuster, HarperCollins, Macmillan) and then decides to self-publish (either through a service like Book Country or by forming an independent team).
We’ve also heard “hybrid author” applied to writers who self-published first and then sold to a major publisher.
We’ve seen authors who first published with a smaller press and then self-published (and the reverse) also use the term.
And, we’ve seen the term applied to authors who are doing both simultaneously. It’s common for a hybrid author to have a book for sale through a traditional publisher and self-publish a second title. We’ve even seen hybrid authors who have a traditional publishing agreement for one title and self-publish novellas or short stories using the same characters. (This is often done for promotional purposes.)
One final example of a hybrid author is an author who has self-published an eBook first. She then sells the print rights for that book to a traditional publisher while retaining the electronic rights.