The 10% refers to the change in return, not the the change in principal.
Case 1: you invest $1000 with a 0% TER and 10% return. That means your return is $100. Your balance would be $1100.
Case 2: you invest $1000 with a 1% TER and 10% return, where the fee is subtracted immediately. After the fee you are left with $990, and your gross returns will be $99.
Your balance would be $1089.
Case 3: you invest $1000 with a 1% TER and 10% return, where the fee is subtracted after one year. Your gross returns are $100, your fees are $11, and your net returns are $89. Your balance would be $1089.
Note that case 2 and 3 are identical since you can directly combine the 10% returns and 1% fee into a 8.9% net return (1.10 × 0.99 = 1.089).
Now, when we compare your returns, we see a 11% difference in returns (only $89 of $100). I.e. that 1% TER amounts to roughly 10% of 10% returns even though there's only a 1% difference in total.
Note that TER doesn't just affect the immediate returns, but has a compounding effect since you can't reinvest those fees. With these example numbers, the 1% TER would cause a 30-year investment to perform 26% worse in total.
Note that these numbers are just illustrative. 1% TER is high for an ETF, and average 10% growth is optimistic.