The pitch to
correspond to the real sound heard when a
c' written on the staff is played by the transposing
instrument. This pitch is entered in absolute mode, so an
instrument that produces a real sound which is one tone higher
than the printed music should use
\transposition should only be used if
the pitches are not being
entered in concert pitch.
Well, yeah, that _might_ be seen as a little misleading.
Certainly, that statement is supposed to say: It does not make
sense to use \transposition for concert-pitch music.
But using \transpose a c'
\some_concert_pitch_music_for_oboe_damore in effect creates music
_not_ in concert pitch, for which then \transposition can (and
should) be used, like in the example I gave earlier.