Vendoring in Software Engineering is the act of including 3rd party software directly in your product. The alternative is to let a dependency management tool install it.
One reason for vendoring is to avoid version conflicts when the dependencies are installed. For example, your amazing software could require the dependency A in version 3.2.1, but the user needs A==3.4.0. Hence the version amazing needs conflicts with the version the user needs for something else. This is especially a problem if your software is a library. Maybe the user needs the library A==3.4.0 in their project AND amazing as well. This issue is solved when amazing also contains A and thus does not trigger the dependency management tool.
However, there is a huge downside to vendoring: You have to make sure you add all security updates and bugfixes of A to your software. If A has a vulnerability, your software has as well. You need to release your software every time A releases a security update or a bugfix.
In the Python ecosystem, vendoring is rare, but some important packages do it: pip vendors its dependencies in pip._vendor, setuptools in setuptools._vendor, and I just stumbled over it in dynaconf.