As quoted, it would be “redundant”, thus you’d never want to do that. It simply does not add any benefit. The whole quote is related to use-site variance, i.e. variance specified by the client (corresponds to wildcards in Java). The class List<out T> already has a declaration-site variance modifier out, which makes the use-site application of out redundant. 
Here's an example of redundant client-site variance:
fun <T> useList(list: List<out T>) {
    println("first element: ${list[0]}")
}
I applied the out modifier to a function parameter of type List<T>, this is an example of use-site variance. It is redundant which the compiler notices: "Projection is redundant". It does not make it worse nor any better.
On the other hand, if you're using a type that is not projected on declaration-site already, it does make sense. For example, the Array class is not restricted in its variance: public class Array<T>.
Rewriting the former example to use Array, it suddenly makes sense to add an out modifier, since the parameter is only used as a producer of T, i.e. not in in position.
Example of meaningful client-site variance:
fun <T> useArray(arr: Array<out T>) {
    println("first element: ${arr[0]}")
}
Rule of Thumb
As a rule of thumb, corresponding to Java‘s PECS (Producer extends, Consumer super), you can memorize POCI for Kotlin (Producer out, Consumer in).