That means that on a given number of tries, the claw will drop a prize that it's grabbed before it delivers it to you.
The owner can manually adjust the 'dropping skill,' as well. The machine's owner can fine-tune the strength of the claw beforehand so that it only has a strong grip a fraction of the time that people play. Instruction manual page showing claw strength. Look at page eight, section subheading 'Claw Strength': Open the manual for Black Tie Toys' Advanced Crane Machine. It's publicly available information, pulled straight from the instruction guides for the biggest claw games out there.
But the bigger reason is more insidious than that: the claw machine is programmed to have a strong grip only part of the time. Some people think the claw machine is so hard to win because the stuffed animals are packed so tightly together. Related Slot-machine science: How casinos get you to spend more money The claw is programmed to grab tightly only part of the time