What does “Protocol … can only be used as a generic constraint because it has Self or associated type requirements” mean?

Protocol Observing inherits from protocol Hashable, which in turn inherits from protocol Equatable. Protocol Equatable has the following requirement:

func ==(lhs: Self, rhs: Self) -> Bool

And a protocol that contains Self somewhere inside it cannot be used anywhere except in a type constraint.

Here is a similar question.