LM386 gain-adjust bypass capacitor
Here the term "bypass" means "bypass for AC signal voltages.
ie allow AC to pass without being affected by the resistor.

LM386 data sheet here

On page 3 they say:


GAIN CONTROL
To make the LM386 a more versatile amplifier, two pins (1
and 8) are provided for gain control. With pins 1 and 8 open
the 1.35 kΩ resistor sets the gain at 20 (26 dB). If a capacitor
is put from pin 1 to 8, bypassing the 1.35 kΩ resistor, the
gain will go up to 200 (46 dB). If a resistor is placed in series
with the capacitor, the gain can be set to any value from 20
to 200. Gain control can also be done by capacitively coupling
a resistor (or FET) from pin 1 to ground.


Gain = 15,000 x 2 / (Ra + Rb)
Initially Ra + Rb = 0.150 k + 1.350 k = 1.5k
So gain = 2 x 15,000 / 1.500 = 20.
Shorting the 1.35K FOR AC increases gain to 2 x 15k/.15k = 200