For normal, “regular” DVB-S2 transponders, a single transponder with a certain set of broadcast parameters (FEC, Symbol rate, modulation) carries a single digital transport stream containing several TV and/or radio services. Just the same as a DVB-C cable or DVB-T/T2 terrestrial multiplex.
In multistream, that same transponder with a set of broadcast parameters carries multiple separate digital transport streams. It’s split virtually. These separate streams can only be viewed on Multistream-compatible equipment - that is equipment that allows you to select which of the virtual streams to lock onto at a time by its ID.
This is most often used for the distribution of digital terrestrial multiplexes via satellite, because satellite transponders are able to be very high bitrate, where terrestrial multiplexes are usually much lower bitrate. Multiple terrestrial transport streams can be carried in one single transponder via satellite, and using multistream allows them to all have their separate data intact instead of being one big stream that would require processing at the transmitter sites to separate out again. This makes it really easy to convert them to terrestrial at transmitter sites, as the transport streams don’t need to be modified at all, and the transmitter site just needs to modulate the actual broadcast signal and be fed with the preassembled data from each separate multistream.
As an example, the French use multistream for their digital terrestrial transmitter feeds via satellite.
They use two transponders, both using parameters of 8PSK modulation, 29950 symbol rate, 8/9 FEC which gives an available transport stream bitrate of around 75-80Mbps.
Each of these transponders can then fit three digital terrestrial multiplex transport streams using multistream, as their bitrate is 24.88Mbps each (due to the DVB-T configuration used by the French transmitters).