I am GM and the players got a YT-1300 and installed Smuggling Compartments. but as it is printed up, the icon for "restricted" is noted in its description. I am new to GMing this RPG and was wondering what it means. Can i get any help on this matter or at least some advice to tell my players what it means?

It just means it's against the law to possess without the proper licensing.

The "Restricted" tag just means that this item is illegal and will attract the wrong kind of attention, in a nutshell

Restricted items are illegal and generally only found on the Black Market.

Depending on how you GM it, those items might need a Streetwise check to actually buy/sell properly.

"Restricted" is mostly a mechanical designation; the roleplaying aspects of it are left to the GM. "Restricted" means, mechanically speaking, that you have to use Streetwise to locate the item instead of Negotiation, and that talents like Wheel and Deal don't apply (legal goods only) but talents like Black Market Contacts do.

From a roleplaying aspect it means that it's illegal to posess the item in any way, even if it's locked away in your ship. If the authorities find it, you're at best looking at having it impounded and some sort of legal action (a fine, arrest, prison time, whatever). This is the part that's mostly up to how the GM wants to run the campaign. In general terms it just means that the item isn't something you keep on display.

It's also a good excuse to spend a D-point to upgrade the difficulty to purchase the item.

Thank you all for your advice. It will help me in the sessions to come.

To add some danger mechanically for restricted items, I add a native upgrade on the checks to find and haggle for the price. Players in my campaign often shop between sessions via Rpol, so there isn't always a Destiny pool to create Challenge dice with. If it's a restricted item of particular interest to the Empire, like lightsabers, it's 2 native upgrades. Despairs mean the authorities (or Inquisitorius) get involved with added Obligation.

From a roleplaying aspect it means that it's illegal to posess the item in any way ,

That's not necessarily true. Restricted items can be obtained legally with the proper permits and licenses. For example, having the IPKC (which any Bounty Hunter can start with) allows legal ownership of many items that would be otherwise illegal.