What does the “Purchasable” option mean while creating an item in Inventory?
Is it about whether the item can be used in purchase transactions?
Yes 
If “Purchasable” is enabled, it means the item can be purchased and sold, and you can create purchase bills for it.
If “Purchasable” is disabled, the item cannot be purchased or sold, and you won’t be able to create a purchase bill using that item.
Got it 
That helps control which items are allowed in purchase transactions.