An impaired Proof coin is one that has condition issues. It is one that may have scratches or problems with its surfaces that would render the coin less than desirable to a collector. An impaired Proof coin may even show signs of circulation and wear. Proof coins are graded similarly to the ways that we grade other coins.
I'd never heard of impaired proof coin, but upon reading & copy/pasting the above definition, it's a far cry from being a proof.
"When a strong man, fully armed, guards his house, his possessions are safe."
- Luke 11:21