SD Blu-ray disc is a Blu-ray disc on which the video is typically standard-definition television quality but the audio tracks can be HD quality, e.g. Dolby TrueHD.
This is usually because the original content (e.g. a concert, show, or a low-budget film) was shot on standard-definition video or in other low-definition format. Thus the original content cannot be presented in high definition.
It has been said that standard definition content on Blu-ray and standard definition content on DVD do not look the same. This is because compression is far better on Blu-ray, as will naturally be the encoding, and it is also possible to provide lossless audio. In most instances, SD on Blu-ray titles reuse previous DVD mastering and are done for the convenience of having content that would otherwise span many DVDs on substantially fewer Blu-ray discs.(e.g. The "SD on BD" release of Samurai Pizza Cats has all 52 episodes on a single disc rather than the 8 discs of previous DVD releases.)
An example of an SD Blu-ray disc is Live at the Rainbow '74 by Queen. The visual content, filmed for TV in 1974, does not meet normal Blu-ray standards, yet it has been released in that format, allowing for the sound to be reproduced in the best possible way.