Truthless is a title given by the Shin to those amongst their people who have betrayed their people in a fundamental way. They are considered the lowliest of the Shin and, therefore, worthless.
The exact nature of 'Truthless' remains as yet unknown. The only Truthless to appear in the series so far is Szeth. As part of his punishment, Szeth is to have no choice. He was sold into slavery and he is obligated to follow the commands of his master - the one who holds his Oathstone - in all things. However, Truthless are banned from the taking of their own lives and from relinquishing their Shardblades. (Such Blades would be reclaimed by a Stone Shaman of Shinovar when each Truthless dies.)
Szeth becomes Truthless due to his belief that the Voidbringers are returning, in contrast to Shin religious beliefs.
|“||I am Truthless. I do as my master requires, and I do not ask for an explanation.||”|
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After the events which occur in Words of Radiance, it appears that Szeth was never Truthless in the first place because the Voidbringers have indeed returned. (Due to the Diagram, Taravangian knew this in advance of its occurrence.)