It’s not.
It’s the wavelength at which the uncertainty derived from lights distortion on space (due to gravity) becomes larger than the wavelength itself, which is the limit of precision for lower energies (wavelength decreases with increasing energy). This makes it impossible to further increase precision without first decoding the distortion. It might be the limit of resolution even with a complete understanding of gravity, but that’s speculation. However, it’s not the smallest possible distance as things can move less than a planck length, it just can’t be confirmed experimentally without making some advancement in our understanding gravity.
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