Emails sent to prospects maybe bounced sometimes due to some reasons, having the wrong email that does not exist or mail server not being found are a few reasons among them.
If any mail sent to any of your prospects gets bounced, then the prospect will be moved to bounced state and will be paused from all the sequences that they are active in.
Once the prospect is in bounced state they can be added to any other sequence.
You cannot move the prospect to a new step in the same sequence but can move him to a New Sequence all together.
You can also correct the email address once you update the existing email and click on retry to send the mail again by going to the sequence-prospects tab and selecting the prospect.
You can do the same from the Prospect Info Screen as well.
Note: If you have multiple prospects in bounced state you can bulk select them all and retry.