It is a cancellation fee for freelancers - if the publication sees your work and decides not to run it, you get the kill fee and you're free to shop the story to other publications. The fee is specified in the contract, commonly 25% but rarely higher.
The vague intention of the kill fee is as insurance against an article being a bad fit, but generally the contract wording is intentionally vague. You can imagine any number of abuses by unscrupulous publishers who have the option to solicit far more material than they intend to publish.
An analogous situation might be a software house outsourcing a task for a flat fee, then dickering around with payment and eventually announcing they've decided your software doesn't pass their new test suite and you can accept a 75% pay cut or gtfo. Bear in mind that day rates for writers aren't what they used to be, and generally can't do a great deal of investigative journalism in your pyjamas.
Just to be sure, I'm more used to seeing 50% kill fees, at least from Asia and West Africa (for Western or Western-run publications). 50% is customary, and with established clients, unsaid until the time comes
It certainly depends a lot on the type of publication (and the nature of the article).
The treatment of articles upon which publishers "choose not to proceed" is very important knowledge going in. Perusing the whopayswriters JSON feed* there is a wide variety of behaviour described, not all of it making everyone look good.
* In the absence of full-text search, left as an exercise to the reader
Featured snippet on Google for the search term "kill fee":
Definition: The kill fee is a negotiated payment
on a magazine or newspaper article that is given
to the freelancer if their assigned article is
"killed" or cancelled.
Something you charge but don't write the piece. Either you or they decide they don't want it from you but it stops you being messed around so much and having your time entirely wasted by people who are being mean/indecisive/silly.
