What does "Chapter N repeated the previous chapter — rewriting it" mean in the progress bar?

It means BookyAI's automatic repetition check caught the first draft of that chapter reusing passages from the chapter before it. The chapter is being written a second time with the copied passages explicitly called out, and whichever draft repeats less is kept. Nothing is needed from you — it's a safeguard working as intended, and it costs one extra AI request for that chapter.