The wording is quite unclear :-(
Assume that your target loaded /usr/lib/libfoo.so, and that on the host (where GDB is running), you have a copy of the entire target tree in /tmp/host. That is, a copy of target's /usr/lib/libfoo.so is found on host in /tmp/host/usr/lib/libfoo.so.
Then, the following commands are almost equivalent:
set solib-absolute-prefix /tmp/host
set solib-search-path /tmp/host/usr/lib
Now consider what happens if you also have /usr/local/lib/libbar.so on target, and a copy of it in /tmp/host/usr/local/lib/libbar.so.
The solib-absolute-prefix as set above is still good to locate libbar.so, but solib-search-path would have to be modified like so:
set solib-search-path /tmp/host/usr/lib:/tmp/host/usr/local/lib
To summarize, if you have entire target tree under a single host $ROOT, then just set solib-absolute-prefix to $ROOT and you should be good.
But if you have to "assemble" target paths from multiple disjoint trees, then solib-search-path with multiple paths will allow GDB to still find correct libraries.