Each hard drive has a special reserved area which contains a number of reserved good sectors. When a read/write error occurs (i.e. a new bad sector appears), disk
firmware would use one of the reserved sectors instead of the damaged one.
This process is called "reallocation".
One reallocated sector is not bad in itself. The concern is that if the defect appeared on the drive, it may grow over time, and the drive will eventually fail. This is why you need to keep an eye on it.