It looks like mercenaries are outlawed and are considered "unlawful combatants". Mercenaries are people who engage in combat for compensation.
Many states have armies where at least some of the servicemen are not drafted - they decide themselves that they want to serve but the state may motivate them by a reasonably high salary, neat life/health insurance, various other benefits such as early pensions or assistance with buying estate. Such servicemen are not outlawed - they are considered "lawful combatants".
What's the difference? Both categories seem to have some compensation for their service. Why are mercenaries illegal and state servicemen legal?