Sorry if I'm explaining the joke, but the term comes from Fender's guitars called Stratocasters. It's a popular guitar shape & configuration, so very many companies have made their own versions of it. However, Stratocaster is a trademark of Fender, so companies don't like to use that name to describe their products, to try to avoid Fender's lawsuits. So the industry has used the term "S-type" or "S-style" to refer to Stratocaster style guitars without actually using the trademarked name.

Similarly, "T-type" and "T-style" is used to refer to guitars similar to Fender's Telecaster guitars.

S = Stratocaster