I saw the same instruction in a hat pattern and couldn't make heads or tails of it either. It seems like the two stitches that are knit together would just hang out in space never to be seen (or knitted) again. But I hadn't tried it yet and figured it might make more sense if I could see it in yarn instead of words. In the case of the hat, they were calling it a "right twist" and it was supposed to make something that looked like a mini cable.
Aha! I found the link: http://www.strickmasche.de/caramel-cable-hat/
And the instructions read like this:
For the small cable, only two stitches are crossed, like this:
K2tog, but do not slip the stitches from the left needel; insert right needle tip betwwen the two stitches just worked and knit the first stitch again, slip both stitches off the left needle.
In the pattern, Right Twist is abbreviated as “RT“.
The part I didn't get was "slip them to WHERE?" Normally I'd assume "slip" meant move them from the LH needle to the RH needle. But if you've knit the first stitch a second time, one of them is already ON the RH needle. So the logistics escape me. At least until I try it. Maybe that will make it clearer.