PSRR measures the ability of a device to prevent noise and spurious signals that appear on the supply voltage pin from coupling to the output of the switch. The DC voltage on the device supply is modulated by a sine wave of 620 mVPP. The ratio of the amplitude of signal on the output to the amplitude of the modulated signal is the ACPSRR. A high ratio represents a high degree of tolerance to supply rail variation.
Figure 8-14 shows how the decoupling capacitors reduce high frequency noise on the supply pins. This helps stabilize the supply and immediately filter as much of the supply noise as possible.