In Transit refers to units that are in between two different storage locations. Units are put into transit when you create a Batch Stock Transfer transaction and you Ship the units from their Origination Sublocation and they are on their way to their Destination Sublocation but have not been received yet. They are in between the two locations, so they are considered to be "In transit."
Once the units make it to their Destination sublocation they would be received. The units would then be "in stock" at that destination sublocation and no longer considered to be in transit.