That's actually XON/XOFF - in the old days when computers could send serial data to your VT100 or whatever faster than it could handle it (and we're talking 9600 baud here), the terminal would send XOFF (ctrl-S) telling the computer to stop sending - then, when the terminal caught up, it would send XON (ctrl-Q) to let the system know it could resume sending.

The advantage of doing it this way ('software flow control') is it worked with just TX and RX lines, rather than having to connect up additional wires to indicate when the terminal was busy ('hardware flow control').