Baking has several meanings:
You can bake a cake: easy, only done in the real world. many recipies, so I won't go any further with this one.
You can bake illumination: This is the process of computing indirect lighting for an object, and add this information into a texture, mapped  over the objects' original materials. This is useful for animation, and for objects that are not animated (props for example), this is done ocne and for all, so the indirect lighting doesn't need to be computed for every frame. Can save weeks of rendering time.
You can bake a primitive or a metablob or a terrain, or a boolean obejct  to a polygonal object. This process transforms said obejcts that are originally defined by mathematical functions into much more CPU friendly polygons. The number of polygons is defined by the user, the more poly, the more complex the object is, and the m:ore it will look like the original object.
Baking isn't supported in all Vue versions, I think complete, Infinite and xStream only.