The term discounted generally means that some of your possible hands, or outs, will not likely, or are guaranteed, not to win the hand.

When speaking of outs it often means outs that while improving your hand, will not be enough to give you the winning hand. Thus you discount those outs.

It is also used in games with community cards like hold'em if the board itself shows the highest hand. Though in this case counterfeit is a more likely term.