From Help > In-Season Management: Many of the best players in the game are on this list throughout the season. When a player is on this list, he cannot be waived from a team under any circumstances—even if he's injured.
The Can't Cut list, which is updated when necessary to account for injury or performance issues, prevents managers at the bottom of the standings from changing the league dynamics by waiving all of their outstanding players. Players are added and removed from the list as appropriate during the season.
This list does not affect your ability to swap a player between active and bench, or make a trade involving him.
The Can't Cut list applies to all leagues, Public and Custom, in Yahoo! Sports Fantasy Football and cannot be modified or eliminated from individual Custom Leagues.