I interpret it similarly to [@mention:450819477777465353].
A concrete example that may or may not speak to you:
At HolacracyOne, I fill the Website Strategy role with a domain on "The holacracy.org and the glassfrog.com public-facing (non-app) websites"
Based on this domain alone, my role seems to control the entire websites so I can do whatever I want with them. However, some GCC policies add some constraints, such as this policy:
Visual representations of the brands must follow the official Graphic Style Guide:
Any role releasing products and materials that graphically represent the Holacracy or HolacracyOne brands must align with the Graphic Style Guide defined by Brand Visual Design.
And this one:
Messaging Standards for the Holacracy Brand:
... (a) All prominent mentions of the brand must include a "®" symbol next to it. ...
(b) All printed or digital documents marketing the brand should include the following statement somewhere in the copy, typically at the bottom of the page or the footer of the webpage: "Holacracy is a trademark of HolacracyOne, LLC."
(c) The name "Holacracy" should be used consistently without spelling deviation: use it capitalized, don't use a translation (e.g. Holacratie, Holakratie), don't transform it into an adjective (e.g. holacratic). ...
So I can change the website however makes sense for my role, but within the constraints of these policies.
Now, proposing a circle policy limiting a delegated domain is valid governance, however it might be a bad idea and someone might have an objection (it would not be a "Not valid governance" objection, but it could be another objection - depending on the specifics)