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This. It means be willing to cut a scene or bit you love *when doing so makes the overall story better.* Not just for the sake of destruction.
"Kill your darlings" only applies if you're holding onto something that actually hurts your story. But jerks sometimes use "kill your darlings" as a weapon to try to break you. Don't wantonly kill what you love the most about your story. That's why you're writing it. Make it work.