In plain terms this means that the W3C will continue to work on the HTML5 specification. WHATWG on the other hand will continue its work with HTML5 as a "Living Standard". The idea of a living standard is that it never settles down and is always being added to and refined. The task of the browser makers and the programmers using HTML5 is to try to keep up.
Overall this doesn't seem to be a good development. It will no longer be possible to say exactly what HTML5 is — the W3C's snapshot or the living standard of WHATWG. My guess is that Chrome and Firefox will adopt as much of the new stuff as possible and Microsoft will simply pick which bits most suit its corporate interests.
So in the future you will need to choose what HTML5 means to you.
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