“True peak” is a measurement standard covered by the EBU R128 and it’s various international versions.
But yes a true peak meter is in a way just what you described, a theoretical model of what happens to a signal as it passes through DA converters. It is used to set max peak levels avoiding output overloads. This metering is most commonly used for broadcast material.
But notice that the wording in the manual is somewhat strange as the true peak meter is part of the loudness meter (I don think it is available in Cubase) and have no relation to the “regular” peak meters within the application or in the control room meter section.