Loop out is a service where you send sats on Lightning to a 3rd party and give them an on chain deposit address. They then send you the sats - network fees - a service fee. I think the most popular service is provided by lightning.terminal. Basically it allows you to move sats from lightning back to on chain without closing a channel.

Loop out often is used to get inbound liquidity as well. You can open a channel and then loop out some of the funds.

Specific to Phoenix, I am not sure exactly how it works, especially if you prepurchase the inbound liquidity from acinq, but basically if you send funds on your side of the channel to an on chain address they splice out most of the liquidity. I didn’t realized how it worked the fist time I tried to use it. I sent 1mil sats to my Phoenix wallet on lightning, acinq opened a channel with my phoenix node of like 1.016 mil sats with 1 mil on my side, then i sent from phoenix to onchain and they spliced out 1mil of my liquidity, leaving me with a 16k capacity channel with me (all invoubd liquidity). I though it was going to work like a loop out leaving me with 1mil sats of inbound liquidity but it doesnt work that way.

You can also use boltz exchange to move from lightning to on chain. It works similarly (perhaps identically) to Loop Out/In.