Think of self-hosting as - instead of depending on cloud services from other entities (google/apple/whoever), you host those services yourself by running them on your own pc or maybe your secondary pc running 24/7 (usually locally, in your own home).

Some common services might be automatic photo backup and storage (like immich), or running an adblocker for your home network, or streaming movie/music from your hard drive to your phone/TV (like jellyfin).