Sweet spot refers to the portion of the lens that gives the clearest picture. Due to the nature of Fresnel lenses, they are susceptible to blurriness around the edges as you get further from the centre. The HP Reverb G2 has a larger spot than most headsets which makes it much easier to use.
To have a large sweet spot has the advantage of not requiring constant adjustment, especially in very vigorous VR experiences. It also means that when looking to the left and right within the headset without turning your head also reduces the amount of loss of focus.