If you are wondering what is “Limited Access” in SharePoint and how does it affect you then here is the simple explanation:
“Limited Access” in SharePoint means a user has an access to an item of the page specifically but not the whole SharePoint list. Normally, we don’t manage individual item permissions and list items normally inherit their permissions from their parent list but sometimes you may need to share a document or a an item to another user who does not have access to the parent list of that item. In this case, you will break the inheritance for that item/document and give permission specifically to that item/document.
Now, since that document resides under its parent library therefore, user will automatically get the “Limited Access” to the parent list which will in turn allow the user to only access that specific document.
For more information, I will recommend you to read Michael Nemtsev article here