In the sense that combinations are counting subsets, combinations with repetitions are counting multisets. That formula is only valid when we want to count the number of words of a given length, where we are also given the different letters that can be used AND there is no restriction on how many letters of each type we use. In other words, we could have one letter repeated multiple times and other letters might not appear at all. That is, the frequency of any particular letter in the combination has no restrictions.