A duplicate reference adds the same model at the same position, rotation and scale as another reference.
Showing the same model twice with exactly the same properties is just wasting resources, in case of animated objects or trees it might even be visually noticeable.
LOD is only generated for the first encountered reference.
For vanilla records this message is written to the debug log while the duplicate reference is disabled for better performance.
In case of mods, the mod author should remove the duplicated references.
How To Fix
To fix the problem open the mentioned plugin in xEdit.
Unfold the plugin in the left tree view. Right click [+] Worldspaces. Select Apply Script...
Select the script Remove duplicate references and click OK to execute it.
The messages log should list the duplicate references being removed.
Close xEdit and save the plugin.