Why do people say “lock in a loss” when you sell at a loss on paper?

Let's say you have $1000 in a stock and it falls 20% and you get scared and sell the whole position.

Ok you've “lost” $200 on paper and supposedly “locked it in”.

Then you buy back in with that $800 into another stock you believe has upward potential and it ends up going up over time and you now have $1030 let's say.

Where's your loss?

And if you mention taxes, then what if it's done in an IRA?

And as far as I know there aren't taxes on a loss.

Peace.