Proration occurs in many fighting games in order to stop combos becoming overpowered. In some games, if moves did a consistent amount of damage, it would be possible to defeat an opponent in a single combo, which would wildly unbalance the game.
The idea is simple: the more times a move hits, the less damage it will do.
Move (A) does 100 damage and has 80% proration. This means that the first attack using move (A) will do 100 damage, while the second usage will do 80 damage, the third 64 damage, the fourth 51 damage, all the way down to 1 damage.
Now suppose an opponent has 1000 health, and that it is possible to combo move (A) 10 times. Without proration, this combo would deplete all the opponent's health. With proration, the combo would only do 446 damage, allowing the match to go on for longer.
Different moves in different games all have different amounts of proration, but as a general rule, fast jab attacks tend to prorate more rapidly than slow, heavy attacks. To maximize the damage dealt in a combo, players must pay attention to the proration of each move and distribute moves accordingly.