I think what they meant is if you receive that raise capped or uncapped. Some places have set wage increases based on years worked until a certain ceiling.

So if you have this annual increase and that capped increase at the same time, you might only beat it because of the additional capped increase. That would mean, at some point, your increase in wages will not catch up with inflation anymore

So in most collective agreements I'm used to you have your classification (the job you have) and that classification has multiple pay steps depending on how many years you've been in that classification (usually going up every anniversary of you being in that classification) and the annual increase is separate thing.

When you first get hired you usually start at step 1 and go up once step every year while also getting the annual increase so it feels like your salary increases a lot more than inflation, but once you've reached the last step all that you get is the annual adjustment that's usually about the same thing as inflation, sometimes a bit less sometimes a bit more...

Here's an example:

Every June 1st you get a raise, but you also get one every anniversary for the first four years so it seems like your salaries increases by a lot during that time. Someone hired June 2nd 2017 would go from 61969 to 84045 after four years but someone that was there since 2010 would go from 77764 to 84045 during that time because they had already reached the last step.