two individuals with the same genotypes, except for those genes determining sex (which is some species don't exist, where sex is environmentally determined),
A: I'm glad you asked.
It means that if I had one missing or dysfunctional gene on my Y chromosome (or was XX instead of XY), I would be phenotypically female, but the rest of my genome would be the same as it is now. A great many aspect of my physical, chemical, social and mental being (my phenotype) have been altered by the effects of this one gene, which acts as a sex switch. Switch on maleness, and a whole bunch of aspects of phenotype are altered. Don't switch it on, and you get a different phenotype.
In some species, there are no X and Y chromosomes, or anything equivalent, to act as a sex switch. Instead, whether an individual develops as a male or a female is determined by the environmental conditions which prevail at a certain point in development. In alligators for example, there is no genetic determination of sex. Instead, if the temperature around the egg is above a certain temperature at a certain point in development, the alligator becomes one sex (I think male, but I don't actually remember). If it is ?colder? than that temperature, you get a female alligator. Many of the aspects of the switch are the same, only the first step of the switch is very different.
So my colleague was pondering the fact that two individuals with similar, or even identical, genotypes can have importantly different phenotypes, based on the action of this switch. This means that whether this switch is on or off can greatly affect the actions of other genes, and therefore the effects those other genes have on the survival and reproductive success of the organism.