It seems to make the assumption that people already know how the Internet Archive’s “wayback” service works, or at least what it’s purpose is.

The essence is that web pages change over time and can be taken down or otherwise lost. A “snapshot” is a capture a webpage at a specific time, and I assume that “time capsule” is some type of format that holds the snapshot as well as the extra metadata. The result is something that can be used later to see that website as it was.