See the manual: Linked vs. Embedded Racks
Essentially, linked racks are “re-usable” combinations of plugins, routing and bindings (just like songs) that you can use within songs. You build a linked rack once, save it to a separate file, and you can use it in your songs. When you pre-load a setlist (for faster song switching), a linked rack is loaded only once (one single instance across all songs), so this saves memory. When you pre-load setlists, you should work with linked racks for most of your plugins, so you don’t create 20 separate instances of the same plugin used in 20 songs.
The background rack is just another linked rack, but it has some special features - it is always loaded when starting Cantabile and stays active across all your songs, but you (currently) can’t route directly between your songs and the backgrund rack, so typically the background rack is used for global, non-song-specific bindings, e.g. to always use a certain MIDI button to switch to the next song…