It means that the output must be the same (e.g. that the car meets the emissions regulation) but how you achieve it doesn't have to be.
Or more, the government being able to say we've left the EU without actually doing so.
It's entirely semantics. The only way not to have a customs border between the EU (Ireland) and the UK (Northern Ireland) is for every regulation, tariff, requirement and rule to be identical. And we've said we don't want a say in the EU rules any more. "Regulatory alignment" is just that - sticking to rules we no longer have any say in.
In a way I feel sorry for Teresa - she's ended up (unelected no less) in a no-win situation, that every opportunity she appears to get to improve things, just turns out to be for the worse. Then I remember her record as home secretary...