A playlist album is an album(usually rap) that is usually 20+ tracks long and is usually filled with lesser quality songs thrown in mixed with quality songs. The goal being you would take the songs you like from the album and put them on a playlist and then never revisit the original album again. The reason for this is in the age of streaming, artist can just inflate their streams and earn more money by just throwing more songs onto an album to farm streams.
This can also include just making a deluxe album that is essentially its own album to make 30+ long tracklists. Do be aware that just because a Playlist Album is 20+ songs does not make it a bad album... it's just an album that seems more geared towards making a playlist from that album for easier consumption
Some examples of Playlist Albums
Pegasus by Trippie Redd
High off Life by Future
My Turn by Lil Baby
The Pink Tape by Lil Uzi Vert
Donda by Kanye West
The newest DJ Khaled album was 25 tracks long and it is just a really bad Playlist Album.