The allowance is named, in dollars, in the quote
You see what Barrie Bathrooms has set aside for what is inside the wall, before the work starts.
A fixed price on a 1987 Painswick house carries the same risk; it is just carried silently, inside the margin. Naming it does two things: you can compare quotes on the finish alone, and when the demolition shows sound PEX you get the allowance back instead of paying for a risk that did not happen.