Short answer: Plumbing replacement swaps out an old or repeatedly failing pipe, faucet, toilet, garbage disposal, or water heater rather than repairing it again.
Replacement usually enters the conversation after repair has already been tried, or when a fixture is old enough that another repair doesn't make financial sense. It's also common when a homeowner wants to upgrade during a remodel.
The pages below cover replacement by fixture, since the decision points — and the installation process — differ quite a bit between a faucet and a water heater.