Not to be used in totally enclosed or recessed luminaires
If you want to fight over legalese, you'll be thrilled to know that the courts have ruled in favor of the Oxford comma. The instructions probably predate the court ruling, but after the Court date, the lights should be totally OK in recessed luminaires which are not totally enclosed. Just be aware this has been appealed. If the Supreme Court reverses, your lights will instantly burn out or start a fire. 

Seriously, though...

The issue is about cooling.  The lamp needs to be cool to function safely.  Either: 


It is an incandescent or HID lamp, and the concern is the high temperature of the bulb starting a fire -- the bulbs love heat, and are happy-dappy at temperatures that would melt nuclear fuel. 
If it is a CFL lamp, (in 2020? Why?) the concern is the electronic driver circuit being cooked to death.  
If it is an LED, that too, but mainly LED emitter temperature management.  The LED emitter makes all its heat in a tiny spot no larger than a dime.  They don't use much energy, true, but when you have 9 watts focused on a spot that small, it becomes difficult to heat-sink.  LEDs are happiest at 25C, are specced at 85C junction temp (at the emitter itself), some can endure 125C, but fry themselves at higher temps.  


So all of them depend on either radiant heating (dissipating through the fixture) or convection cooling (air taking away the heat, then moving on through).  Radiant heating is often enough for incandescents and HID, and most older fixtures are built only for this.  They are not made for the additional cooling required by efficient bulbs.