Exactly what the name suggests.
The problem:
In SL, avatar hitboxes are generated according to information relative to the system body. These hitboxes are, when working correctly, a big box that encompasses the entire avatar's view model.
The avatar's hitbox immediately becomes non-representative of the avatar's visible size in various conditions: crouching your avatar, wearing an unrigged attachment larger than the system body (or smaller), using deforming animations with avatars that are atypically shaped such as nonhumanoids, hover height, animations that offset the avatar's viewmodel, etc.
This leads to issues such as: avatars getting stuck on terrain, or being able to pass through terrain they visibly shouldn't be able to, and avatars in shooter style games not being able to hit their intended target with projectiles as their visual model does not correspond with their hitbox.
Proposed solution:
Let users manually adjust the hitbox of their avatar. As long as it is just a literal box then letting users simply adjust the size of that hitbox to whatever scale and position they feel is appropriate.
Considered issues with solution:
Issue: People will intentionally abuse this to give themselves the smallest hitbox possible for an advantage in combat.
Answer: People can already use various methods such as offset animations or simply making their avatar as small as possible to try and get this sort of advantage. Many combat sims have their own rules against avatars of a certain scale they enforce locally and are already capable of policing this sort of behaviour themselves.
Issue: When an avatar enters a crouch/crouch walk their visual model is smaller and they move slower but their hitbox does not adjust. This solution does not resolve this specific element of the issue.
Answer: This concern leads me to think about the relative dissimilarity between crouching animations, and animations in general relative to avatar's singular generic hitbox. Being able to have an adjusted hitbox relative to every form of avatar motion so animation was always representative would be good. Otherwise, I imagine just being able to manipulate the existing hitbox scale would be a more expedient way to resolve a lot of this problem in the short term.