Truncation is a fifth wave that fails to reach the end of the third. The move runs out of breath on its last leg: the structure has five waves, but there is no new extreme.
What it looks like in the markup
Normally the end of the fifth wave is the furthest point of the whole impulse. Under truncation the furthest point remains the end of the third, and the fifth finishes short of it.
That does not make the markup impermissible: there is no hard rule saying the fifth must set a new extreme. What is forbidden is something else — the third failing to reach the end of the first.
Why the peak stays in question
If a new extreme appears beyond the peak, that is direct evidence the fifth wave is not finished — either this is a diagonal or a truncation, and in both cases calling it over is premature.
So a count that says "the impulse ended here" is worth holding in question until price has moved far enough the other way: while it keeps returning to the old extreme and exceeding it, the fifth wave may still be unfinished.
How it differs from a diagonal
Both live at the end of a move, both mean the fifth wave behaved unusually, and both come up in the same argument: is the move over or not.
But they describe different things. A diagonal is about the overlap of waves 1 and 4 and about converging boundaries. Truncation is about the fifth failing to reach the end of the third. A diagonal may be truncated, or it may not.
Why it matters when reading a chart
Truncation is the main reason "five waves have finished" does not equal "the move has finished". The fifth may have fallen short, in which case a stretch that looks like a completed impulse is in fact incomplete.
This is precisely why one peak carries several readings: some treat the fifth as finished, others do not, and both pass the rules.
What truncation does not predict
Neither a reversal nor a continuation. It describes the geometry of a stretch already travelled: the last leg came out shorter than expected. Nothing about what comes next follows from it.