It's hypothetical because it shows you what you hypothetically would have made if you'd invested $10,000 into the fund and left it there.
It's not a trivial or meaningless detail, because actual investor returns depend on their timing of purchases and sales, and (amazingly) it is often quite different from the hypothetical buy-and-hold number, and usually lower.
Morningstar has a very neat feature called "investor returns" which shows collectively what investors actually made, based on the history of fund inflows and outflows. It can be very different from the (hypothetical) total return of a buy-and-hold investor.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.