The "Backpack" is the space along the side of the Hero Profile board where Hero characters keep Items that they have with them but don't have equipped in the "In Use" slot.
Hero Profile
The Hero Profile Board, or Hero Profile Card, is a cardboard component with space for keeping some tokens and Item cards relating to the Hero, and also contains a portrait of the hero, a description of their specific abilities, and equipment icons indicating what kinds of equipment they can use.
On the right side of the board, there is also an "IN USE" slot where one single Item card can be placed, and a note "BACKPACK" along the right edge of the board where other Items can be placed.