It means he would get less points than he got the season before, yep.
If I get 100 points for winning Tourney X on February 1st 2006, I have 100 points from that week contributing to my ranking for the whole year.
Then, when I come back to defend Tourney X on February 1st 2007, my ranking for last year was based on 100 points from Tourney X.
If I lose in the semis and only get 50 points, I am effectively 50 points down from where I was last year.
If I didn't bother my arse to play at all that week, I would have 0 points, and have lost 100 points from my ranking.