An alternative explanation with images can be found on itch.io docs.

Co-op bundles on itch.io are a collection of items from different developers sold a specific price during a specific duration. The major difference between a co-op bundle and a sale is that. It consists of different developer not just one.

The creator of a co-op bundle is called the host, and the members are called participants.  Co-op bundles have only one host.

Creation Process: After the co-op bundle is created by the host, itch.io does not automatically notify its participants. The bundle is also not visible to non-participants till every participant approves the bundle. The approval system is a way to ensure every participant agrees with how the hosts setup the bundle. Participants can verify with a link to the bundle (the host is responsible for sharing this). Please note the following:

• After the creation of a bundle, the price, participants, revenue sharing and duration cannot be changed by host. Therefore, in the case of mistakes or participant(s) refusal to approve, the host has to recreate the bundle from scratch and every participant added has to reapprove.
• The approval button is found at the bottom of the itch.io page.

Itch.io Bundles are sometimes hosted through Itch.io Jams. This allows the host and participants to:

• Participants can easily ask questions through the community
• Host can easily contact participants through Itch.io Jam Mail System and through Jam Submission Comments.
• Host can easily collect links through submission CSV.

An itch.io co-op bundle is a way for itch.io participants to support each other through a collective sale. It may also be a way to raise money for a charitable cause. Bundle Everywhere is aimed to provide bundles to a wider general audience and support game developers.

Also:

• A must-read FAQ