As the Question states. Could someone help me understand the reason behind the same ?
Factor timing is when you actively deviate from a factor (such as size, value, momentum, or a sector) relative to the benchmark. It’s a top-down approach because it’s not done at a security level.
Bottom-up managers use security selection to drive alpha. For example, I might think FAANG stocks (Facebook, Amazon, Apple, Netflix, Google) will drive the next bull market. So I go long in these five stocks only. This a security level bet. A bottom-up (and discretionary) bet.
On the other hand, I might think that the biotech sector is going to get hammered due to political risk and general fears of drug price controls. If the benchmark has a 20% allocation to biotech, I might go -10% in biotech (significant short bet). This is a top down (discretionary) strategy. I might think small cap stocks will outperform large cap stocks once the S&P500 recovers from all this inverting yield curve fears. I’ll give my portfolio a small-cap tilt by allocating more into small-cap stocks. This is an example of factor timing, the factor being size. Picking those small cap stocks may also entail a degree of bottom-up analysis. So this becomes a hybrid - factor timing and security selection. Any kind of security level decision is likely to be bottom-up. Decisions at a higher level (sector or factor level, or driven by macro variables) is top-down.
This was very helpful. Thanks a lot mate 
Factor timing is synonymous with factor rotation right?
And your example of the biotech is a top down sector rotation strategy, yes?
Yes. Yes, with high active risk (and potentially high or low active share depending on concentrated or diversified securities).
What about bottom up discretionary?
In the cfai chart, this quadrant has potential factor timing. What would that look like?
^the only way I understand that is it’s a hybrid where you use discretionary bottom-up security selection, but the securities are all part of a top-down sector rotation.
Thanks a lot for the clear explanation!
Think of the top down inverted pyramid. Factor is broad based, macro driven, thus top down. It can be used by both, in a hybrid approach. Once the factor is realized (50’day crossing 200 day MA, PE target, etc) take action on individual securities which may have utilized bottom up. But the factor, macro based starts with top down. Edit: factors change relative to a pre specified benchmark/value.