2017 Recruiting Wikipedia (the source of all knowledge. Anyone in the world can write anything they want about any subject, so you know you are getting the best possible information.) says:
"In some instances, a college coach/recruiter may designate an athlete as a "preferred walk-on" during the scouting process. In this situation, the athlete is assured a spot on the team, but the coach is unable or unwilling to offer a scholarship."
that seems to be the general consensus on a google search.