Transit Traffic is nothing more than the traffic that it comes on the ingress interface of the router, is checked against the routing table, and then is sent from the egress interface of the router.

Ingress means inside, and egress means outside. To explain it better, let me show it with an illustration:

The left-side PC wants to send a packet to the right-side PC – this is called transit traffic because it will pass via the Juniper router. First it will enter via the ingress interface which is Ether2, then will be checked against the forwarding table (normally we refer to it as routing table, but don’t confuse with the routing table of the Routing Engine), and if it finds the destination network on the routing table it will forward it from the egress port. In case nothing is matched in the routing table, then the packet will be dropped at the router side.

Finally, to remind you, all this happens at the Forwarding plane where the Packet Forwarding Engine is.