Definition
A recovery phrase is an ordered set of words used by compatible wallet software to derive or restore a collection of cryptographic keys.
In market context
Anyone who learns the complete phrase can often recreate the wallet and control its assets, even without the original device or password. Secure backups should remain offline, private, accurately ordered, and protected from loss, damage, photography, cloud leakage, and social engineering. A platform or legitimate support agent should never ask for the phrase, and entering it into an unverified application can transfer control immediately.
Risk context
There is usually no central reset for a lost phrase and no reliable way to reverse theft after a phrase is exposed.
Source
Use the primary source for fuller regulatory or market context.