Bitcoin is a ledger of outputs that can be spent only by whoever holds the matching private keys. Self-custody means those keys are generated and kept by the holder, on a hardware wallet, a signing device or software they run, rather than by a service that keeps an internal balance on the holder's behalf.
The distinction is legal as much as technical. A custodied balance is a claim on the custodian, governed by its terms of service and the regulator that supervises it; a self-custodied balance is a bearer asset. Block's own boilerplate describes Bitkey as "a simple self-custody wallet built for bitcoin" in the same release that announces a bank to custody bitcoin for customers: the same company sells both doors.
The Gazette treats self-custody as the default the reader is learning toward. It is the second half of the paper's line: read the ledger, keep the keys.