The actual quote was “Never interrupt your enemy when he is making a mistake”.
It seems obvious - let your opponent fully execute their mistake so that you can take maximum advantage of it.
In boxing, if your opponent is winding up for a big, slow roundhouse punch and you see it coming a mile away…. Let them throw that punch! Be prepared to dodge it and, more importantly, be prepared to take advantage of the opening it creates.
Napoleon was a master of this sort of timing and nowhere was this displayed better than at Austerlitz. Napoleon lured the Allied armies of Russia and Austria into marching off the high ground (the Pratzen Heights) in order to attack Napoleon’s “weak” right flank.
In reality, Napoleon had Davout and his III Corps force march up from Vienna to strengthen his right flank while he held Soult’s corps in reserve in the center. Once the Allied armies had fatally weakened the center by marching to attack Davout, Napoleon sent Soult forward with a devastating attack that decided the battle.
Had Napoleon launched that attack too soon (before the enemy had completed his mistake), the attack would have run into that large body of troops and victory would have been much less assured.