Most wall receptacles are of the duplex grounded type which provides for two places to plug in at each outlet. Appliances should always be fitted with three-prong plugs (called “caps”). The wall receptacle has three openings: two parallel slots plus one U-shaped opening. The latter is provided so that every appliance is grounded. The third wire in every cord is connected to the frame of the appliance or motor. With proper grounding, any appliance that accidentally becomes hot internally has little likelihood of severely shocking anyone. This means that there must be a three-conductor cord, a three-prong plug, and a three-opening receptacle known to be grounded.
What you are likely referring - was commonly used as a means to update older 2 prong electrical receptacles or older K&T wired receptacles. It was often used as an interim modification as long as the ground slot was sealed with silicone caulking. The intent was to stop or hinder the installation of 3-prong plugs connecting to the receptacle ground slot.
It is common today to use a GFCI receptacle in its place.