This refers to any actual goodwill that may remain in a trademark after it has been abandoned (i.e. discontinued with no intent to resume its use).
Some courts refuse to recognize the concept, but it remains strong as a doctrine to watch out for. Afterall, the hallmark of trademark law is whether a consumer might be confused. In the case of residual good will, it's easy to see how a consumer could decide to purchase something because of a name the consumer has positive associations with, not realizing what they are actually buying is from another source altogether - and completely unwaware of the original user's abandonment.
Examples include when the artist formerly known as Prince, appeared to expressly abandon "Prince" in favor of a symbol, and when a company started using "LaSalle" after General Motors stopped using that name for its Cadillac line some 60 years earlier.