As I understand it, wood that isn't as tough, durable or, well, stable as you would want a knife handle is sometimes stabilized through a process that infuses the wood fibers with what amounts to plastic or other substances that ensure that the wood will not come apart in use.
This is often used in a variety of burl woods that have interesting and convoluted grain paterns, but which also might more easily separate under hard use.
I think that some woods that might be too soft, but which can be colored or which have interesting grain patterns are also stabilized to make them suitable for knife handles or other uses.
I also prefer "real" wood, desert ironwood (non-burl), rosewood, osage orange etc. which tend to be tough enough to use without needing stabilization. That said, I can see why a maker would use stabilized wood. it allows a comfort level knowing that the wood is as tough as possible so that the customer is satisfied with the product.