It layers the price protection of stop-limit-order onto the ratchet logic of trailing-stop. The trail follows favourable moves and freezes on adverse ones; the limit then caps how bad the exit can be.
That cap is also the flaw. In the disorderly moves where you most need out, the limit is exactly what stops you getting out, and you keep the position.
Example: long at 100 with a $2 trail and a 10-cent limit offset. Price runs to 108, so the stop sits at 106 with a limit of 105.90. A gap opens the next day at 101: the stop triggers and a sell limit at 105.90 rests uselessly above the market while you hold a losing position.
Related: stop-order-slippage, reduce-only-order, gap-risk, trailing-stop