Aww, I'm kinda disappointed that my "what is selout?" question didn't kick up a shitstorm like in those links there. Sadface.
So literally it's "selective outlining", colloquially it's dark broken outlines (esp. against light backgrounds), practically it's just anti-aliasing done badly, or done to specific contexts, and ultimately, it should never, ever, be discussed because nobody knows for certain what it is, or whether it exists. Did I get the gist?
Would you hate me if I said it looks okay sometimes? I like Capcom's sprites...