Exactly what is this?

When and/or where on the tree does this occur?

Look at the first post on this forum and you will see a photo by photo process-- about the 6 th pic down you will see the bark slipping /seperating from the wood. This occurs in the warm part of the year ( spring, summer & early fall) with the best time to bud probably the spring, then early fall. Go to the tutorial forum and look there- the first post will help and there are others posted as well

Thanks Fred,
I had previously read those but it doesn't explain what or why it is. Do other graftable trees do this? Is it only on a limb of a certain age? Is it unique to citrus?

The woody stem of a tree (or shrub or woody vine) consists of the "wood" in the central area, which is predominantly xylem tissue -- the water-conducting vessels that are carrying water and mineral nutrients upward from the roots. Outside that is the inner bark, predominantly phloem -- the conducting tubes that carry things the plant makes -- sugars from photosynthesis, amino acids, various hormones -- throughout the plant in both upward and downward directions. Outside that is the outer bark, consisting mostly of cork. Between the xylem and the phloem is a layer, usually only a single cell thick, called the vascular cambium (usually nicknamed simply "cambium.") This is the layer of cells that divides rapidly, sending new xylem cells inward and new phloem cells outward, allowing the trunk or branch to thicken. This happens whenever the plant is in a growth flush.

In T-budding or bark-grafting, we want the bark to "slip," meaning that we want it to break/peel cleanly away from the wood at exactly the right depth. During an active growth flush, the cambium layer, as well as the outer xylem a cell or two or three deep, as well as the innermost phloem, up to a few cells deep, is softer, and more easily torn, than are the more mature tissues. So if you cut into them and apply a sideways pressure, they tend to tear at that point, allowing the bark to peel away parallel to the cambium layer. If the bark is slipping well, it will peel back as easily as peeling a ripe banana -- the bark holds together, and separates cleanly from the wood with only the slightest pressure from your knife.
What is left is the wood surface with little stripes and patches of active cambium, and the inner bark surface, also with the rest of the cambium stripes and patches. If you lay a bud into that area with its own cambium exposed along the back, cut side, you get cambial contact between the scion and rootstock at those points. Also, once the area has been wounded, that layer will very rapidly start dividing to produce callus tissue -- the wound-healing tissue of plants, which looks a bit like raw cauliflower. Once the gaps are filled up with callus, the cells will differentiate into a neat layer of cambium between the scion's original cambium and the stock's original cambium, to form a single, continuous layer again. Then that cambium goes back to its normal division, producing a new, continuous layer of xylem to the inside and phloem to the outside, and at that point, the graft is complete.

At times when the plant is not in active growth, the cambium is more or less dormant, so if you try to peel the bark back at that time, it may rip unevenly, or just be very difficult to get to rip at all, so we say the bark is not "slipping" at those times. You could still use chip buds or veneer grafts or cleft grafts at those times, since they don't depend on the bark slipping, but the methods like T-budding are next to impossible to accomplish at those times in the plant's life cycle.

You have to have "slippage" to perform T budding. After you make the T cuts, you insert either the blade tip bark lifter, or the brass bark lifter at the back of the knife, and easily open the flap to slide in the Tbud. It is a matter of experience and practice. Sometimes the flap wont lift, sometimes it is still stiff, and rips halfway. Ideally, the flap will lift very easily, on both sides of the vertical cut. The rootstock flaps and the white wood below will appear moist and glistening, and the bud will slide easily into place without force.
Slippage occurs in any other plant species can be T budded, some others may have very thick bark that can't be lifted etc. Some species can be physically T budded, but the bud take is very low, so other methods must be used.

Thanks Mr. Manners and Pagnr.

A very good description and explanation.