what does 'Embedded' mean in this context?

forgive my ignorance on such a basic concept. I read 'Embedded' as in 'for Embedded systems'

Does it mean 'Embedded in your rust application'?

Yes, "embedded database" is a term-of-art for in-application database. Many (most?) databases run a client-server architecture even for local apps.

We can think about a web application that can use SQLite or Postgres. Both use SQL as language, but Postgres is a separate service with its own port and ops work.