No, the term doesn’t refer to building two roads side by side.
When you no longer can be sure that there are things the government wouldn’t do, you have to base your assessments on the things that it could do.
The problem is the number of people, predominately on the left, that are not bothered by the concept.
But what’s being done with parallel construction, is that the intelligence community is able to give “hints” to law enforcement, allowing them to come up with various pretenses for an investigation, avoiding ever having to reveal that the NSA or others used potentially illegal surveillance efforts.