Right now the /tools directory is owned by the user lfs, a user that exists only on your host system. Although you will probably want to delete the /tools directory once you have finished your LFS system, you may want to keep it around, for example to build more LFS systems. But if you keep the /tools directory as it is, you end up with files owned by a user ID without a corresponding account. This is dangerous because a user account created later on could get this same user ID and would suddenly own the /tools directory and all the files therein, thus exposing these files to possible malicious manipulation.
To avoid this issue, you could add the lfs user to your new LFS system later on when creating the /etc/passwd file, taking care to assign it the same user and group IDs as on your host system. Alternatively, you can (and the book assumes you do) assign the contents of the /tools directory to user root by running the following command:
chown -R 0:0 /tools |
The command uses "0:0" instead of "root:root", because chown is unable to resolve the name "root" until the password file has been created.