it’s very, very widely misunderstood
the reality is that it actually signifies very, very little
spot forex “brokers” often claim to be “STP brokers” to encourage their customers to believe that their “broker” doesn’t hold the other side of their trade, but passes it on to a “liquidity provider”, but there’s often no way of knowing whether the brokerage actually owns the “LP” as well, so it sometimes signifies nothing, really
the recent post linked to just below, and the 5 or 6 posts following it, ought to tell you what you actually need to know, i think:-