The rule means you can't create a second project at Lulu using exactly the same specifications as the first project but price it lower. For example (this is an example of one of the books on my storefront), if you create a 252 page hardcover, 6x9 size project in English and get an ISBN and a distribution package and make it available for retail sale on the Lulu MarketPlace and other online retailers and the retail price is $26, you can't then create a second 252 page hardcover, 6x9 size project in English and make it available for sale on the Lulu Marketplace only for a lower price.
You can, however, create a second project using a different format (e.g. in paperback binding, or a different size) or a hardcover 6x9 in a language other than English. The ISBN rules do not allow you to use the ISBN from your first project (252 page hardcover, 6x9 size project in English) for a different format (e.g. paperback v hardcover or a size other than 6 x 9) or a language other than the language in which the book was originally published (or you used a different publisher other than Lulu for the same format) and you would need a separate ISBN.
Lulu's membership agreement provides for non-exclusivity, so it doesn't prevent you from publishing the same content elsewhere at the same time. But you can't use a free Lulu ISBN elsewhere as it's issued in Lulu's name and ISBNs identify not only the book but also the publisher of the book.
